China calls President Obama to block 'harmful' currency bill

(Shanghai Daily)

08:05, October 13, 2011

China has urged the Obama administration to block a controversial currency bill aimed at putting pressure on the country to appreciate the yuan. 

The bill is a protectionist step that "gravely violates World Trade Organization rules," Foreign Ministry spokesman Ma Zhaoxu said yesterday after the US Senate approved it in a 63-35 vote and sent it to House of Representatives.

Ma said the move was "harmful and unbeneficial."

"China calls on the US government, Congress and various communities to firmly oppose the wrongdoings of pressuring the yuan exchange rate by US legislation," Ma said. "We should resist protectionism, resist politicization of economic and trade issues, and safeguard the healthy development of Sino-US relations."

The legislation will "disrupt the shared efforts of China and the United States, as well as the international community, to promote vigorous recovery and growth in the global economy," said Ma.

A Ministry of Commerce spokesman said the bill sent a "false signal of escalating trade protectionism" that threatened global economic recovery.

In a written statement, Shen Danyang added: "It severely violates the international rule, putting a stable Sino-US economic and financial relationship at risk while running against the global efforts of fighting against protectionism."

The Currency Exchange Rate Oversight Reform Act passed by the Senate would, if it became law, allow the US to raise tariffs on Chinese imports it says are unfairly cheap due to an undervalued yuan.

Tan Yaling, president of the China Forex Investment Research Institute, said the bill was unreasonable as the US had adopted a wrong criteria to judge China, which remained a developing country with a currency that is not fully convertible.

"A sharply rising yuan will be very dangerous. It will do harm to the already shaky global economic recovery while doing nothing good on the reduction of US joblessness," Tan said. "The US should realize that China is a partner, not a rival, in terms of bilateral trade. Otherwise, it will be a lose-lose situation and both countries will get hurt."

However, the bill is unlikely to become law as it lacks the support of the majority Republican leadership in the House. And the White House and President Barack Obama, although not coming out against the bill, have shown they are uncomfortable with it, according to the Associated Press.

Dan Steinbock, research director of international business at the India, China and America Institute, an independent think tank based in the US, said the bill would face overwhelming hurdles before it could become law.

"Backing for the bill comes from the pressure of political positioning for the 2012 presidential election," Steinbock said in a recent article. "After all, the House of Representatives is wary of unilateral sanctions against China, and shows little interest in bringing the bill to a vote."

Huang Yiping, an economist at Barclays Capital, also believes that the bill will not become policy given it still needs to be passed by the House and signed by the president. 

"But the Senate's passage is already sufficient to sour the atmosphere for bilateral cooperation at a time when it is most needed to maintain global growth and stability," Huang said.

The America Chamber of Commerce in China has also criticized the bill as a threat to trade and financial relations.

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Leave your comment6 comments

Jack Smith, USA at 2011-10-1324.26.135.*

If Obama vetoes the U.S. currency bill, it"s a clear victory for China, as it will show that China controls the U.S. from afar. Jack Smith, USA

PD User at 2011-10-1375.161.13.*

China they are undermining our economy and destroying the american work force. They dont play far so why should we. They need us more than we need there cheap goods. Besides they poison our apple juice there is lead in baby toys coming from there. They are our enemy. First Iran then China. Oh rahhh

elee at 2011-10-13183.39.46.*

China should NO longer need to ask for mercy of any worldly matter such as this "currency manipulation fabrication" cunningly crafted as congressional bill of bullshits against China. It is one of the ways or techniques developed to disgrace China wholesomely and internationally (* US, UK & EU journalists and/or reporters had identified such dirty techniques being applied against China almost daily *). China has grown up and must be able to fend off such crafty attacks at all times by simply ignoring them all; but make a world of noises on the side of them all by escalating and worsening their attacks so that they, the dirty politicians and ordinary folks, may learn & understand how to pick up the pieces, eventually among themselves (* a chronically sicked Libya is a classic example of a mess so created *) since they love such ordeals in their intrinsic cultures. China has its absolute right to defend its own decisions for its national survival while others are playing dirty and crafty games to smear China’s image globally. ECB and US Fed are manipulating currencies as well as BoJ and SNB like we are now witnessing daily; but ironically how come there is no party out there to make such high levels of fusses and job stealing? China must learn harder to play their dirty games too by making the murky waters being caused by them all much murkier in this world like they say, ”Let’s swim or sink together, if need be, else so sorry, men!”. Enough is enough of their bloody nonsense and bullshits!

PD User at 2011-10-13183.39.46.*

China should NO longer need to ask for mercy of any worldly matter such as this "currency manipulation fabrication" cunningly crafted as congressional bill of bullshits against China. It is one of the ways or techniques developed to disgrace China wholesomely and internationally (* US, UK & EU journalists and/or reporters had identified such dirty techniques being applied against China almost daily *). China has grown up and must be able to fend off such crafty attacks at all times by simply ignoring them all; but make a world of noises on the side of them all by escalating and worsening their attacks so that they, the dirty politicians and ordinary folks, may learn & understand how to pick up the pieces, eventually among themselves (* a chronically sicked Libya is a classic example of a mess so created *) since they love such ordeals in their intrinsic cultures. China has its absolute right to defend its own decisions for its national survival while others are playing dirty and crafty games to smear China’s image globally. ECB and US Fed are manipulating currencies as well as BoJ and SNB like we are now witnessing daily; but ironically how come there is no party out there to make such high levels of fusses and job stealing? China must learn harder to play their dirty games too by making the murky waters being caused by them all much murkier in this world like they say, ”Let’s swim or sink together, if need be, else so sorry, men!”. Enough is enough of their bloody nonsense and bullshits!

Jean-Francois Morf at 2011-10-1381.13.248.*

China has invested a trillion $ in infrastructures in 2008, 2009, 2010, 2011... Democratic Obama discovers he could possibly invest 1/3 trillion $ in infrastructures in 2012, in order to be reelected...Without elections, he would never have thought to infrastructures!Reread Keynes: QE1 and QE2 should not have been used for enriching the billionaires cereal speculators to multi-billionaires, but should have directly created 46 millions new jobs for infrastructures works, payed from the FED!Do not rely on any democrat or republican plutocrats for organizing any new jobs for the 46 millions new poor they have created by five folding the USA financial costs from 2004 to 2007!

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