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US attacks China's currency stance [Copy link] 中文

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Post time 2010-6-11 11:33:51 |Display all floors
US politicians have repeated threats to impose trade sanctions on China if it continues to refuse to revalue its currency, the yuan.

Both Democrats and Republicans on the Senate Finance Committee warned US Treasury Secretary Timothy Geithner that their patience was wearing thin.

Mr Geithner said China's stance was impeding global economic reforms.

The US has long complained that Beijing keeps the yuan undervalued against the US dollar to gain a trade advantage.

Some analysts argue the yuan is undervalued by as much as 40%.

Senator Charles Schumer, a leading Democrat, said he was confident a bill imposing sanctions on China would be passed successfully if needed.

"The issue here is not US protectionism but China's flouting of the rules of free trade," he said
'Flexibility needed'

Mr Geithner told the committee that distortions caused by China's stance were "an impediment to the global rebalancing we need".

China pegged the value of the yuan to the US dollar in 2008 in order to keep its exporters competitive amid falling demand in the global recession.

Mr Geithner said that Beijing's shackling of its currency, also known as the Renminbi (RMB), to the dollar was causing other Asian countries to intervene in foreign exchange markets at record levels.

"A more flexible RMB will allow market forces to play a more active role over time in facilitating strong, balanced and sustainable growth globally," Mr Geithner said.

Last month, at high level trade talks with the US, China said it would seek "gradual progress" on reforming the exchange rate of the yuan, but set no timetable for doing so.

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Post time 2010-6-12 11:01:55 |Display all floors
Oh my god,  RMB has gradually appreciated...
inflating are become worse and worse , goods prices are soaring ...oh my god !

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Post time 2010-6-12 12:19:40 |Display all floors
Originally posted by totothedog at 2010-6-11 14:35
Tax-dodging Timmy has been saying this is purely 北京's decision. Now he's saying it's holding back the global ekonomy's growth.

What he means is that the Great Satan can't default on its debt b ...




I think what you are forgetting here is that the US says it is China's right to value their currency how they want, but if the US sees China's policy as giving Chinese companies benefits in trade over US companies, then the US will retaliate with their own policy.  Just as it is China's right to value its currency, it is the US"s right to put sanctions on companies that benefit from unfair trade policies.  

I'm not sure if you understand the basic principles of economics.  First, you have to realize that inflation is becoming a serious concern in china.  I have been living here for over 6 years, and even I have noticed the inflation increases.  However, we all know that last month's inflation was over the Chinese government's threshold of 3 percent.  It was actually 3.1 percent.  A rising value of the RMB would help lower inflation and here is how that works.  First, most natural resources are priced in dollars or another international currency like the Euro.  Everything aspect of a nation's economy is rooted in its ability to get natural resources.  If the RMB value goes up, China can then buy more natural resources for less money, thus making manufacturing, transportation, energy, and even things like paper cheaper.  It is cheaper, because the natural resources are cheaper.  So, many people in China just think that a higher valued RMB will help them buy imports, but they fail to see that every business and their spread sheets are based on the price of natural resources.  

Besides, another argument is that if China is valuing their currency too low, it is hindering other low wage nations in their ability to export, thus hurting economic growth.

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Post time 2010-6-12 12:28:02 |Display all floors
Originally posted by totothedog at 2010-6-11 14:35
Tax-dodging Timmy has been saying this is purely 北京's decision. Now he's saying it's holding back the global ekonomy's growth.

What he means is that the Great Satan can't default on its debt b ...




I think what you are forgetting here is that the US says it is China's right to value their currency how they want, but if the US sees China's policy as giving Chinese companies benefits in trade over US companies, then the US will retaliate with their own policy.  Just as it is China's right to value its currency, it is the US"s right to put sanctions on companies that benefit from unfair trade policies.  

I'm not sure if you understand the basic principles of economics.  First, you have to realize that inflation is becoming a serious concern in china.  I have been living here for over 6 years, and even I have noticed the inflation increases.  However, we all know that last month's inflation was over the Chinese government's threshold of 3 percent.  It was actually 3.1 percent.  A rising value of the RMB would help lower inflation and here is how that works.  First, most natural resources are priced in dollars or another international currency like the Euro.  Everything aspect of a nation's economy is rooted in its ability to get natural resources.  If the RMB value goes up, China can then buy more natural resources for less money, thus making manufacturing, transportation, energy, and even things like paper cheaper.  It is cheaper, because the natural resources are cheaper.  So, many people in China just think that a higher valued RMB will help them buy imports, but they fail to see that every business and their spread sheets are based on the price of natural resources.  

Besides, another argument is that if China is valuing their currency too low, it is hindering other low wage nations in their ability to export, thus hurting economic growth.

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Post time 2010-6-12 16:40:07 |Display all floors
The purpose of U.S.A to force Chinese Yuan to appreciate is neither to help China curb its inflation nor to help other nations increase their export. The rapid growth of China economy in the recent years has made US envy and fear. The foreign exchange reserves held by China also make US uneasy. The deppreciation of US dollar will be an ideal way to shrink China's fortune. This is an insidious plan.
If Chinese Yuan is really under-valued, it must be first proved by statistics and then appreciated step by step to the reasonable rate. A sudden change of exchange rate will push China's economy into disaster. Anybody holding this vicious idea is hypocratical rogue.

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Post time 2010-6-12 16:52:04 |Display all floors

China must think to their self

USA has a debit with China of more than 3 trillion US$. That is why USA is desperate!

China should start making pression to USA and not be dominated by USA.
I guess USA must print more and more money to cover all debits and fraud

Best Regards.
http://sib.webs.tl   -> The real face of USA

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Post time 2010-6-12 17:25:52 |Display all floors
Originally posted by mickey007 at 2010-6-12 16:40
The purpose of U.S.A to force Chinese Yuan to appreciate is neither to help China curb its inflation nor to help other nations increase their export. The rapid growth of China economy in the recent ...




You can continue to think that, but you are completely wrong.  It isn't only the US who wants china to revalue the currency.  It is also many other countries including some EU countries, South Korea, Brazil, and even some chinese government officials at the central bank of china.   The currency is pegged to the US dollar.  So, no matter what statistics you use, and people manipulate statistics all the time, it won't be enough to prove the RMB is or isn't undervalued.  I agree that the RMB needs to float slowly as to keep from shocking the economy too much, but at the moment the RMB is most certainly not valued according to the market.  It is pegged.  That is a simple fact.  

Of course, the US is interested in its own interest.  China is also looking after its own interest when it pegged the RMB to the dollar.  Your a little naive if you think the US can just let China get away with pegging the RMB for trade benefits.  The US can and probably will retaliate with trade sanctions.  It has nothing to do with being jealous of China's growth.  In fact, the US had low tariffs on Chinese goods for over 15 years, which helped US companies come to china and export.  However, this relationship can't continue.  China needs to drop their tariffs on US goods, which were extremely high in comparrison with US tariffs on Chinese goods for the past 15 years.  Then China needs to slowly revalue its currency and stimulate its domestic consumption.  The US, on the other hand, needs to start saving more and stop spending.  Only this will create a more balanced world economy, which will benefit everyone.  

Wen Jiabao said that if China revalued the currency and stopped giving subsidies to exporters (a violation of WTO rules), many companies in China would close down.  So, China is obviously, and this is the most obvious you can be, supporting their businesses with protectionist policies.  If they are not competitive, they should adapt instead of seeking trade benefits through protectionism.  But it seems like the Chinese want only US companies to compete without protectionism, while Chinese companies have all the protection they can get from the Chinese government and tax payers.   

China always says they want a win-win solution, but most of their solutions are just a win for China, including the currency issue.  China says one thing and does another.  

In the end, China can decide its own currency policies. But, the Chinese shouldn't cry when the US retaliates.  The US can also decide its own policies as well, including putting trade sanctions on China if they don't act.

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