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Snow: Trade action against China won't work
(Reuters)
Updated: 2006-01-06 15:15
WASHINGTON - U.S. Treasury Secretary John Snow urged China on Thursday
to allow further revaluation of its currency, the yuan, saying it would help
world economies adjust from trade and current account imbalances, but warned
against retaliatory trade measures.
Treasury Secretary
John Snow, pictured here in 2005, warned against trade measures
against China in a call-in TV program on January 5, 2006.
[AFP] | "The trade deficit is influenced by lots
of things, differential growth rates, differential savings rates and investment
rates and so on. But clearly, getting the yuan more appropriately valued will be
helpful to the global adjustment process," he said on CSPAN television.
But Snow defended the administration's decision not to formally cite China as
a currency manipulator, saying U.S. pressure on Beijing has been effective and
that Chinese policy-makers recognize further revaluation is in their national
interest.
"They are putting in place mechanisms to allow their currency to have greater
flexibility... so I think we're on the right course," Snow said.
If the United States tried to pressure China to adopt a more flexible
currency through trade actions against Chinese imports, it might only result in
corresponding measures against the United States and create market uneasiness,
he warned.
U.S. manufacturers complain that, even after a modest revaluation of its yuan
currency last July, China's currency remains seriously undervalued and that lets
China unfairly run up steadily mounting surpluses on its trade with the United
States.
"China's behavior is inviting lots of negative reaction in the Congress,"
Snow said in response to questions after an address to the U.S. Chamber of
Commerce.
"They do need to clean up their act on intellectual property, they do need to
understand that trade is a two-way street," Snow said. "We're not satisfied one
bit on the currency issue, but it's awfully important we resist these
protectionist pressures."
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