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China not to be listed currency manipulator
(Xinhua)
Updated: 2009-10-15 01:11 BEIJING - China would not be labelled as a currency manipulator in a U.S. Treasury Department report due out Thursday, experts in Beijing said on Wednesday. U.S. labor and manufacturing groups urged President Barack Obama last week to live up to his campaign promise and formally label China as a currency manipulator in a semi-annual report to be submitted to the Congress.
"They are harping on the same string to ease stress from within their countries ", said Zuo Xiaolei, chief economist with the Galaxy Securities. The United States has been accusing China of deliberately undervaluing its currency to give Chinese companies price advantages in international trade, costing the interests of U.S. companies and job opportunities in the U.S. market. Given the close trade relations between the two countries, the "The U.S. government would not designate China as a currency manipulator", for it knows the move would hurt itself in the economic sector, said Zuo. Yi Xianrong, a researcher with the Institute of Finance under the Chinese Academy of Social Sciences (CASS), said designating China as a currency manipulator would be an "economic disaster", for he believed that it would hamper the joint efforts of China and the U.S. to fight the financial turmoil, and would have bad influence on the recovery of global economy. Last year, China contributed over 20 percent of world economic growth, and the percentage would be even higher this year. Besides, the U.S. is the world's biggest economy. Cao Honghui, a researcher with the Institute of Finance under the CASS said that the Chinese currency hype by Western countries was aimed at blaming China for the global financial crisis. "If the yuan appreciated, the dollar rate would drop, easing the debt pressure of the U.S. government, however hurting China's foreign reserves", said Cao. The United States believed that its trade imbalances with China was caused by the deliberately undervalued Renminbi currency. This was rejected by Zuo Xiaolei who said that instead of the Renminbi currency, the excessive demands of the U.S. market and the country's high-tech trade barriers were the cause of trade imbalances between the two countries. She said the imbalances in the world economy was resulted from the over-consumption of the United States and the bubbles of its financial market. The Chinese government should not care too much about the U.S. accusation as a currency manipulator, said Mei Xinyu, a researcher with the Academy of International Trade and Economic Cooperation of the Ministry of Commerce. The country should stick to the mechanism reform for setting the Renminbi exchange rate, said Mei. China began to conduct reforms in its exchange rate regime in July of 2005. Since then, the Renminbi has appreciated by over 20 percent against the U.S. dollar. Whether or not to appreciate the yuan is not only measured by the foreign trade, but also the country's economy itself, according to Zuo Xiaolei. Chinese premier Wen Jiabao vowed in March that the government would keep the yuan at a reasonable and balanced level, stressing that it is China's own decision to reform its currency regime and other countries should not press on it. |
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