Reuters | Sep 1, 2010 | 4:03am IST
The U.S. Commerce Department decided on Tuesday not to investigate whether China subsidizes exports to the United States by undervaluing its currency, prompting renewed calls for Congress to act on the issue. "It’s clear that China games the system by manipulating its currency," Senator Sherrod Brown said in a statement after the department announced its decision in cases involving imports of coated paper and certain aluminium products from China. "I’m disappointed that the Obama administration has yet to recognize this fact. I stand committed to addressing Chinese currency manipulation through legislation if the administration fails to act," the Ohio Democrat said. In both cases, U.S. industry groups argued China effectively subsidizes exports by keeping its currency at an artificially low value to the dollar and asked the department to impose countervailing duties in response.
Commerce Department officials said the petitioners failed to make their case. "The allegations made by domestic producers do not meet the statutory standard for initiating an investigation," Commerce Deputy Assistant Secretary Ronald Lorentzen said in a statement. However, the department did not completely rule out the possibility of using countervailing duties against China’s exchange rate action if groups come up with a better argument. Sander Levin, chairman of the House of Representatives Ways and Means Committee, said his panel would examine that possibility and "other courses of action" at a September 15 hearing on China’s exchange rate policy. Meanwhile, the Commerce Department set preliminary duties ranging from 6.18 to 137.65 percent on aluminium "extrusions" from China to offset other alleged subsidies. That decision provides relief for a group of U.S. producers, including William L Bonnell Co, Hydro Aluminium North America, Kaiser Aluminium Corp and Sapa Extrusions Inc that have sought protection in the case.
Reuters | Thu Apr 8, 2010 | 6:29pm IST
The yuan and other Asian currencies rose sharply on Thursday as speculation intensified that China might soon unveil a long-awaited shift in its exchange-rate regime by revaluing its currency. The New York Times reported that Beijing was very close to announcing a "small but immediate" revaluation of the yuan and would then let the currency fluctuate more widely. The despatch from Hong Kong, which quoted people with knowledge of the policy consensus emerging in Beijing, coincided with the arrival in the Chinese capital of U.S. Treasury Secretary Timothy Geithner for hastily arranged talks with Vice Premier Wang Qishan. A late advance in the yuan in Shanghai to 6.8235 per dollar, its highest rate since October 2009, fanned the talk that change was afoot.
The rise on the day was tiny but nonetheless significant because the People’s Bank of China tightly controls the currency’s movements through its interventions in the market. In offshore markets, three-month yuan/dollar non-deliverable forwards fell to the lowest level since July 2008, implying a 1 percent rise in the Chinese currency over that period. Other Asian currencies rose in sympathy. "The U.S. dollar got smashed down against the South Korean won, Indonesian rupiah and Taiwan dollar, not to mention the yuan," said a Singapore-based trader. U.S. officials declined to comment on Geithner’s talks, but he has repeatedly made the case that it is in China’s, as well as the world’s interest, to permit a renewed rise in the currency.
Reuters | Thu Apr 1, 2010 | 9:24am IST
China’s currency is clearly undervalued, but pressure on Beijing to make its currency rise in value won’t trim the US trade deficit with China or reduce the jobless rate, say American economists. Political pressure is building on the Obama administration to name China a "currency manipulator" in a mid-April report, and lawmakers are threatening to slap tariffs on Chinese goods to offset any export subsidy a cheap currency gives China. However, many trade economists and businessmen say that at best, a heavy-handed US approach on currency will fail. At worst, it could backfire, sparking a US-China trade war. Instead, Washington should address the currency and other factors behind global financial imbalances in a multilateral setting. Bilaterally, the Americans should focus on Chinese trade barriers that suppress sales to China and may violate World Trade Organization (WTO) commitments, they say.
"The currency is undervalued, period. It’s also a structural distortion because the world’s second-largest economy shouldn’t be pegging to the largest economy," said Derek Scissors of the Heritage Foundation in Washington. Economists say China’s currency is pegged to the dollar at a rate that is between 15 and 40 percent lower than the level markets would set if the yuan were freely traded. Slamming the Chinese over currency is politically appealing in an election year in which US unemployment is near 10 percent and China’s trade surplus is expanding again.
JOBS AND TRADE
Economically, however, "this is a dead end," warned Scissors. "If you’re looking to create jobs, the currency change won’t do it. The Chinese have reserved large parts of their market for the state — by rules, by subsidies, by everything you can imagine — and that’s the big cap on US exports, not the
BBC NEWS | 2010/02/04 | 09:38:17 GMT
- Google – China denies being behind an alleged cyber-attack on the US search engine
- Taiwan – a US sale of $6.4bn (£4bn) of defensive arms to Taiwan has angered Beijing
- Tibet – China says a US meeting with the Dalai Lama would “undermine relations”
- Trade – rows over imports and exports of meat, media, car tyres and raw materials
- Iran – the US fears China will not back tougher sanctions against Tehran over its nuclear programme
- Climate – the US is disappointed at China’s tough position at the Copenhagen Summit
China has hit back at the US a day after President Barack Obama promised to take a tougher line with Beijing over currency and trade. Chinese foreign ministry spokesman Ma Zhaoxu said the value of the Chinese Yuan was not the main reason for the country’s trade surplus with the US. Mr. Obama vowed to ensure countries were not giving their currencies an unfair advantage over the dollar. Ties between the US and China have been strained over an arms deal with Taiwan. Tensions have also risen over reports of Chinese cyber-attacks on US-run websites and a planned visit to the US by the Dalai Lama.
US companies have long complained that China keeps its currency artificially undervalued, allowing a steady flow of cheap exports around the world. At a meeting with Senate Democrats, Mr. Obama was asked whether the US would cut ties with Beijing over continuing trade Continue reading