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Friday
Feb042011

Obama Administration: China Not a Currency Manipulator

Photo Courtesy - ChinaFotoPress/Getty Images(WASHINGTON) -- In a much-anticipated semi-annual report to Congress, the Obama administration on Friday again declined to cite China as a currency manipulator despite continued pressure from Capitol Hill.

In the report, the Treasury Department stated that “based on the resumption of exchange rate flexibility last June and the acceleration of the pace of real bilateral appreciation over the past few months, and in view of the commitment during President Hu’s visit that China will intensify its efforts to expand domestic demand and further enhance exchange rate flexibility,” the agency had decided not to brand China as a currency manipulator.

The Treasury said that China’s progress towards a more flexible exchange rate has been “insufficient” and that “more rapid progress is needed.”

Members of Congress on both sides of the aisle have vociferously urged Treasury to denounce China as a currency manipulator in recent years.

A group of Senate Democrats led by Chuck Schumer, D-N.Y., last month renewed a push to get the administration to target China. The senators argued that China costs U.S. jobs by undervaluing the yuan, a move that helps China sell its exports for less. The senators said the yuan is undervalued by 25 to 40 percent.

The lawmakers’ bill would ratchet up pressure on the Treasury to cite China and other countries for employing artificial exchange rate policies and it could impose higher tariffs on imports from these countries. Despite efforts on Capitol Hill to get Treasury to pinpoint China as a currency manipulator, the administration has opted for tough talk instead, as evidenced by this latest report.

Last month Treasury Secretary Tim Geithner said China’s currency was “substantially undervalued” and noted that “this is not a tenable policy for China or for the world economy.”

Copyright 2011 ABC News Radio







ABC News Radio