US President Barack Obama has criticised the Chinese government, accusing it of “gaming” international trade by maintaining the yuan at a low level.
The US Senate has advanced a bill to retaliate against Beijing for alleged currency manipulation.
Mr Obama, speaking at a White House press conference, stopped well short of backing the legislation and even worried it could violate World Trade Organisation rules but nevertheless delivered an assault on China’s policies.
“China has been very aggressive in gaming the trading system to its advantage and to the disadvantage of other countries, particularly the United States,” he declared.
“And that makes their exports cheaper, and that makes our exports to them more expensive. So we’ve seen some improvement, some slight appreciation over the last year. But it’s not enough.”
His comments came as the US Senate defied White House complaints and stiff opposition from China and big business to press ahead with legislation punishing Beijing for alleged currency manipulation.
The proposal, powered by a tide of US voter anger at the sour US economy and high unemployment ahead of November 2012 elections, calls for retaliatory duties on Chinese exports if the yuan’s value is unfairly “misaligned.”
Senators voted 62-38 to end debate on the measure, barely clearing a 60-vote hurdle, as supporters promised the bill would help create much-needed jobs and narrow the country’s yawning trade deficit with China.
A procedural feud seemed set to push a final vote on the legislation to Tuesday, when the measure was expected to pass, but it faced an uncertain future in the House of Representatives, where Republican House Speaker John Boehner has signalled the legislation will die.
“It’s dangerous. You could start a trade war. And a trade war, given the economic uncertainty here and all around the world – it’s just very dangerous, and we should not be engaged in this,” Mr Boehner said.
Few in Washington dispute the charge that China keeps the yuan unfairly low against the dollar, giving its goods as much as a 30% edge over comparable US products, widening the US trade deficit and costing American jobs.
But the measure’s opponents warn that it risks sparking a trade war with China, and say a rise in the yuan will boost manufacturing and therefore jobs in countries like Vietnam or Malaysia – not in the US.
They contend that, if successful, the bill will increase the cost of commodities or consumer goods from China, hurting rather than helping US businesses and families.
The legislation’s backers, an unusual coalition of Democrats and Republicans, have said it’s time for Washington to take on Beijing, and predict a boost in the yuan will make Chinese workers wealthier and more likely to buy US goods, thus creating jobs and narrowing the trade gap.
- US senators plan China currency bill (Independent Online) (thuytinhvo.wordpress.com)
- Obama Says China Manipulates Its Currency (blogs.wsj.com)
- October.03 News (thuytinhvo.wordpress.com)
- US Senate postpones currency vote (bbc.co.uk)