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WASHINGTON Members of Congress from both parties sought on Tuesday to put more pressure on China to allow an increase in the value of its currency, saying Beijings policy of holding the value down to give China an edge in export markets was holding back job creation in the United States.
In response to longstanding frustration over the Treasury Departments refusal under successive administrations to cite China formally for manipulating its currency, five senators introduced a bill that would all but compel the administration to act. A manipulation finding could prompt retaliatory efforts by the United States.
In addition, 130 House members sent a letter on Monday calling on the Treasury to issue a finding of manipulation and on the Commerce Department to impose countervailing duties to protect American manufacturers.
The Senate bill would require the Treasury to identify fundamentally misaligned currencies based on specific criteria. The bill would seek to address one reason that the United States has not cited China for manipulation since 1994, which is that a finding of manipulation requires intent.
If the Treasury designated such a misaligned currency for priority action, that would set off other steps, including an investigation by the Commerce Department that could result in import duties to counter the effects of foreign export subsidies.
I believe the Chinese dont believe in free trade, one of the five senators, Charles E. Schumer, Democrat of New York, said. I believe theyre mercantilist, that they simply want to increase their economic power and will do whatever it takes to do that.
Representative Tim Ryan, an Ohio Democrat who helped organize the House letter, said the Chinese currency distortion was undoing some of the effects of the stimulus in the United States
To have one country pegging their currency at a certain level instead of letting it float is dishonest, he said. We need to rectify that. Its putting a lot of Americans out of work.
China has built up $2.4 trillion in foreign reserves in part by propping up the value of its currency, the renminbi, which has the effect of subsidizing its exports and making imports more costly.
On Sunday, the Chinese premier, Wen Jiabao, rebuffed calls for China to end its currency policy, saying he did not believe the renminbi was undervalued.
In a statement, the Treasury said it was reviewing Mr. Schumers proposal, and added: That said, we too have serious concerns about Chinas exchange rate policy. The rebound of Chinas economic growth and exports and their continued large-scale reserve accumulation indicate clearly that China should resume appreciation of the renminbi.
The White House press secretary, Robert Gibbs, said at a news briefing: The president mentioned just a few days ago that he wished and hoped that China approached their currency using a more market-based interpretation.
In 2005, Mr. Schumer and a Republican senator, Lindsey Graham of South Carolina, introduced legislation to impose a hefty tariff on Chinese imports. The tariff received broad support in the Senate, but the senators backed down after China took steps to appreciate the renminbi. That gradual appreciation ended in 2008.
In Tuesdays effort, Mr. Schumer and Mr. Graham were joined by Senators Sam Brownback, a Kansas Republican; Debbie Stabenow, a Michigan Democrat; and Sherrod Brown, an Ohio Democrat.
C. Fred Bergsten, director of the Peterson Institute for International Economics, said administrations had failed to take action against China for various reasons. The Bush administration was concerned about maintaining a free trade policy, he said, and the Obama administration has been fearful of provoking retaliation from the Chinese, or a trade war.
The Treasury secretary, Timothy F. Geithner, caused a stir last year when he declared that the Chinese manipulated the renminbi. He quickly backed down and, like his predecessor, Henry M. Paulson Jr., has argued that negotiating with China would be more effective than saber-rattling.
Source: Senate Bill to Press China on Currency Manipulation - NYTimes.com
In response to longstanding frustration over the Treasury Departments refusal under successive administrations to cite China formally for manipulating its currency, five senators introduced a bill that would all but compel the administration to act. A manipulation finding could prompt retaliatory efforts by the United States.
In addition, 130 House members sent a letter on Monday calling on the Treasury to issue a finding of manipulation and on the Commerce Department to impose countervailing duties to protect American manufacturers.
The Senate bill would require the Treasury to identify fundamentally misaligned currencies based on specific criteria. The bill would seek to address one reason that the United States has not cited China for manipulation since 1994, which is that a finding of manipulation requires intent.
If the Treasury designated such a misaligned currency for priority action, that would set off other steps, including an investigation by the Commerce Department that could result in import duties to counter the effects of foreign export subsidies.
I believe the Chinese dont believe in free trade, one of the five senators, Charles E. Schumer, Democrat of New York, said. I believe theyre mercantilist, that they simply want to increase their economic power and will do whatever it takes to do that.
Representative Tim Ryan, an Ohio Democrat who helped organize the House letter, said the Chinese currency distortion was undoing some of the effects of the stimulus in the United States
To have one country pegging their currency at a certain level instead of letting it float is dishonest, he said. We need to rectify that. Its putting a lot of Americans out of work.
China has built up $2.4 trillion in foreign reserves in part by propping up the value of its currency, the renminbi, which has the effect of subsidizing its exports and making imports more costly.
On Sunday, the Chinese premier, Wen Jiabao, rebuffed calls for China to end its currency policy, saying he did not believe the renminbi was undervalued.
In a statement, the Treasury said it was reviewing Mr. Schumers proposal, and added: That said, we too have serious concerns about Chinas exchange rate policy. The rebound of Chinas economic growth and exports and their continued large-scale reserve accumulation indicate clearly that China should resume appreciation of the renminbi.
The White House press secretary, Robert Gibbs, said at a news briefing: The president mentioned just a few days ago that he wished and hoped that China approached their currency using a more market-based interpretation.
In 2005, Mr. Schumer and a Republican senator, Lindsey Graham of South Carolina, introduced legislation to impose a hefty tariff on Chinese imports. The tariff received broad support in the Senate, but the senators backed down after China took steps to appreciate the renminbi. That gradual appreciation ended in 2008.
In Tuesdays effort, Mr. Schumer and Mr. Graham were joined by Senators Sam Brownback, a Kansas Republican; Debbie Stabenow, a Michigan Democrat; and Sherrod Brown, an Ohio Democrat.
C. Fred Bergsten, director of the Peterson Institute for International Economics, said administrations had failed to take action against China for various reasons. The Bush administration was concerned about maintaining a free trade policy, he said, and the Obama administration has been fearful of provoking retaliation from the Chinese, or a trade war.
The Treasury secretary, Timothy F. Geithner, caused a stir last year when he declared that the Chinese manipulated the renminbi. He quickly backed down and, like his predecessor, Henry M. Paulson Jr., has argued that negotiating with China would be more effective than saber-rattling.
Source: Senate Bill to Press China on Currency Manipulation - NYTimes.com
