House panel set to approve China currency bill

Discussion in 'China' started by SHASH2K2, Sep 24, 2010.

  1. SHASH2K2

    SHASH2K2 New Member

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    Chinese honeymoon is over . House panel set to approve China currency bill

    WASHINGTON (Reuters) – A congressional panel, in a move likely to increase trade tensions with China, was set on Friday to approve a bill that allows the United States to slap duties on goods from countries with "fundamentally undervalued" currencies.

    The House of Representatives Ways and Means Committee was expected to approve the bill, clearing the way for an expected vote in the full House next week. The measure, however, may never become law because of the uncertain outlook for the Senate to approve it.

    Lawmakers have long threatened legislation if China did not take action to increase the value of the yuan, which critics inside and outside Congress say gives Chinese companies an unfair trade advantage.

    But Congress, in a fierce election season focused on sluggish U.S. economic growth, appears poised to move closer than ever to passing legislation that would penalize China. President Barack Obama, who has said that China has not done enough to raise the value of the yuan, has not taken a position on the legislation.

    Chinese Premier Wen Jiabao, earlier this week, said the exchange rate of the yuan against the dollar is not the main reason for the U.S. trade deficit with China.

    The bill amends U.S. trade law to essentially allow the U.S. Commerce Department to treat a undervalued currency as an export subsidy if certain criteria are met.

    The change adds a new subsidy -- persistent and fundamental currency undervaluation -- to the list of subsidies the U.S. Commerce Department can already offset with "countervailing duties."

    Commerce Department officials estimate that currently less than 3 percent of U.S. imports from China are hit with either countervailing or anti-dumping duties.

    That number is expected to rise if the "Currency Reform for Fair Trade" becomes law because the promise of potentially higher duties could encourage more U.S. companies to bear the cost of trade litigation to seek import relief.

    Many U.S. lawmakers and manufacturers complain China deliberately undervalues its currency by as much as 25 to 40 percent. However, under the bill, the Commerce Department would have to decide the precise amount of any undervaluation when presented a case.

    Earlier this week, eight former U.S. Commerce Secretaries and Trade Representatives warned that expanding the U.S. countervailing duty law to treat undervalued currencies as a subsidy could backfire on the United States.

    They said China was likely to challenge the measure at the World Trade Organization, exposing U.S. exports to trade retaliation if Beijing won the case.

    It also could undermine U.S. pressure on China to lower trade barriers, stop piracy and counterfeiting of U.S. goods and change policies that threaten other U.S. intellectual property rights, they said.

    House panel set to approve China currency bill - Yahoo! News



    Looks Like AMerica is preparing for a trade war with China.
     
    Last edited: Sep 25, 2010
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  3. SHASH2K2

    SHASH2K2 New Member

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    USA - Farm groups pushing a snowball uphill

    AMI and 35 other farm and business associations are fighting a law that seeks to address the value of China’s currency but, they say, would boost antidumping duties and allow foreign trading partners to impose countervailing duties on U.S. exports.


    A letter the groups sent to Rep. Sander Levin (D-Mich.), chairman of the House Committee on Ways & Means and ranking member Rep. Dave Camp (R-Mich.), points to problems with the Currency Reform for Fair Trade Act. It was sent in advance of a committee hearing on the matter Wednesday.




    The groups contend that the bill would require an increase in antidumping duties for the estimated amount of currency undervaluation and empower the Department of Commerce to investigate other nations’ currency undervaluation as a trade subsidy eligible to be offset by countervailing duties.
    “We agree that China needs an exchange rate that better responds to global trade flows, and believe that China should implement concrete measures to move toward a market-determined exchange rate,” the organizations wrote in the letter. “We strongly disagree that legislation is the best means to achieve that goal. Instead, we believe the United States should continue to work multilaterally and bilaterally to press China to allow market forces to determine the value of its currency, and thereby aid in the global economic rebalancing that it has called for along with the other members of the G-20.”




    The proposed legislation, the groups said, appears to violate U.S. commitments under World Trade Organization rules governing the calculation of antidumping duties and the types of subsidies that are subject to countervailing duties. And, they contend, the United States’ non-market economy antidumping methodology already adjusts for currency undervaluation, as margins are calculated using market-based values from a third country and do not use Chinese costs or prices.
     
  4. SHASH2K2

    SHASH2K2 New Member

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    Obama asks Wen for more action on yuan


    (Reuters) - President Barack Obama urged Chinese Premier Wen Jiabao on Thursday to take rapid steps to address a dispute over the value of China's currency and made clear the United States would protect its economic interests.

    A two-hour meeting between Obama and Wen on the sidelines of the U.N. General Assembly was dominated by a lengthy, candid discussion about an issue that has been a persistent irritant in U.S.-Chinese relations and now has the attention of U.S. lawmakers.

    The talks between Obama and Wen came as U.S. lawmakers appeared to move closer than ever to acting on long-standing threats to pass legislation that would penalize China for keeping its currency artificially weak.

    Critics inside and outside Congress say China deliberately undervalues its currency by as much as 25 percent to 40 percent to give Chinese companies an unfair trade advantage, hurting U.S. exports and employment.

    Both Obama and Wen spoke in diplomatic niceties in their public remarks at a picture-taking session as their talks began. Obama stressed that both countries must work to achieve balance and sustained economic growth and Wen said, "Our common interests far outweigh our differences."

    During their private talks, Obama said the currency issue was the "most important issue" of their meeting, said Jeffrey Bader, the senior National Security Council official for Asia. He said there was a far more intensive discussion of the topic than in their previous meetings.

    Bader said Obama "made clear that we're expecting to see more action, more significant movement" on China's yuan in the months ahead and noted that the Obama administration had authorized a couple of complaints about Chinese trade practices through the World Trade Organization.

    "So the president made clear that, through that and in his meeting, that he's going to protect U.S. economic interests and that we look for the Chinese to take actions. If the Chinese don't take actions, we have other means of protecting U.S. interests," Bader said.

    Wen told Obama that China would press ahead with reforming exchange rate rules for the yuan, Bader said.

    "Premier Wen did reiterate the Chinese intention to ... continue with reform of their exchange rate mechanism," he said.

    Wen's delegation did not speak to reporters after the meeting, but during the picture-taking session Wen told Obama he believed all differences between the United States and China could be resolved through dialogue and that he had a constructive attitude.

    Wen and Obama also discussed tensions between China and Japan in the East China Sea.

    "It's not in our interest to see these countries in this kind of a dispute," said Bader, echoing Secretary of State Hillary Clinton's call for a peaceful resolution in her meeting with Japanese Foreign Minister Seiji Maehara.

    Obama stressed to Wen the "U.S. interests of freedom of navigation in the South China Sea" and the importance of peaceful resolution of maritime territorial disputes between China and its southern neighbors, said Bader, who added the issue would be discussed on Friday when Obama meets leaders of the Association of Southeast Asian Nation countries.

    China's central bank said in June it would loosen a peg against the dollar and let the yuan fluctuate more freely. It has since risen 1.8 percent against the dollar.

    But the slow appreciation of the yuan makes it an easy target for U.S. politicians eager to address high unemployment in an election year.

    In a speech on Wednesday night, Wen rejected any link between the level of the yuan, also called the renminbi, and a U.S. trade deficit with China that annually exceeds $200 billion.

    "The main reason for the U.S. trade deficit with China is not the renminbi exchange rate, but the structure of trade and investment between the two countries," he told U.S. executives and China experts in New York.

    HOUSE COMMITTEE SETS CURRENCY VOTE FRIDAY

    A U.S. House of Representatives committee has scheduled a vote for Friday on a China currency bill that would treat China's "undervalued" currency as an export subsidy, and allow the U.S. Commerce Department to impose countervailing duties on Chinese products to offset the undervaluation.

    Bader said the Obama administration did not take a position on the currency legislation, beyond wanting to ensure it was consistent with international obligations.

    "The president made no commitment to Premier Wen about this legislation," he told reporters.

    Pushing back against the U.S. pressure, Wen said on Wednesday that China also had big job considerations and the 20 percent appreciation of the yuan demanded by U.S. lawmakers would cause many bankruptcies in the Chinese export sector, where firms operate on thin margins.

    A sharp appreciation of the yuan would not bring jobs back to the United States because American firms no longer make the labor-intensive products China exports, Wen added.

    Prospects for action in the Senate, which would also have to approve legislation, are uncertain. Key senators have said time may be too tight since lawmakers hope to leave Washington shortly to campaign for the November 2 elections.

    "Both Democrats and Republicans from industrial districts need a vote on this before they go home in November, and that's ... I think what's really driving this issue," said Lloyd Wood, spokesman for the Fair Currency Coalition, an alliance of manufacturing and labor groups that backs the currency bill.

    "It's never been more clear to me that China responds to pressure than over the past week," said Scott Paul, executive director of the Alliance for American Manufacturing. "It's the one currency in the world that's pegged to political pressure."

    But Stephen Orlins, president of the National Committee on U.S.-China Relations, said that if the bill passes "and creates a trade war, we will have shot ourselves in the foot."

    The U.S. Treasury Department said it would "carefully examine" any proposals put forward by Congress.

    A U.S. Trade Representative's office spokeswoman said it was reviewing whether the House bill was consistent with World Trade Organization rules.

    Obama invited Chinese President Hu Jintao to Washington for a state visit next January and Hu accepted, Bader said.
     
  5. SHASH2K2

    SHASH2K2 New Member

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    [video]http://in.reuters.com/article/video/idUSTRE68L5K120100923?videoId=163435266[/video]
     
  6. sesha_maruthi27

    sesha_maruthi27 Senior Member Senior Member

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    Why is China under valuing yuans? What is the reason?:emot0:
     
  7. Armand2REP

    Armand2REP CHINI EXPERT Veteran Member

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    I don't think it would have a problem passing in the US Senate, that is probably the only bipartisan issue it has. It would also look good for the coming elections. No American voter is saying YEAH CHINA!
     
  8. SHASH2K2

    SHASH2K2 New Member

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    Undevalued currency help them to boost their export. They will be able to export goods at cheaper rates. Thats one of reason for them dominating Exports .
     
  9. SHASH2K2

    SHASH2K2 New Member

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    Sarkozy to press currencies role for G20

    PARIS (Reuters) - President Nicolas Sarkozy has set an ambitious agenda of creating a new international monetary system and taming commodity speculation for France's presidency of the G20 global economic leadership forum from November.

    At first sight, it is easy to dismiss such grand designs as a futile drive, in the Gaullist and dirigiste tradition, to curb the power of the dollar and shackle free markets.

    But Sarkozy's agenda may appeal to the emerging economies of China, India, Brazil and Russia, irked by the dollar's hegemony, while offering sufficient incentive to draw in the United States and Britain, despite their belief in floating exchange rates.

    It also has a domestic payoff for a president hoping to leverage his international statesmanship to revive his battered popularity, and neutralize a highly popular potential rival, ahead of a tough 2012 re-election campaign.

    For Washington, discussing currencies in the wider forum of the G20 rather than the inner sanctum of the Group of Seven industrialized economies -- the United States, Japan, Britain, France, Germany, Italy and Canada -- may offer the advantage of engaging trade powerhouse China in exchange rate cooperation.

    The United States believes the yuan is undervalued, giving China an undue advantage in exporting to the West.

    Beijing has rejected any international discussion of its foreign exchange policy to date. It even blocked an attempt by G20 leaders in June to praise in their communique its decision to allow greater flexibility in the yuan's exchange rate.

    In an August 25 speech airing his ideas, Sarkozy suggested that the proposed discussion of a new global monetary order might start with a seminar of experts in China.

    Diplomats expect this to feature prominently when Chinese President Hu Jintao visits Paris later this month.

    "What is desirable and indeed necessary today is to put in place instruments to avoid excessive currency volatility, the accumulation of imbalances and the quest for ever bigger foreign exchange reserves by emerging countries which have faced sudden and massive withdrawals of international capital," Sarkozy said.

    Some French officials have talked of a possible agreement on trading ranges for currencies, along the lines of the 1985 G5 Plaza Agreement. But Sarkozy stressed in his speech he was not advocating a return to fixed exchange rates.

    Economy Minister Christine Lagarde said France would use its G20 chair to discuss proposals for wider use of International Monetary Fund special drawing rights (SDRs) as a global reserve currency -- an idea mooted by China's central bank chief.

    Russia too wants an alternative to the dollar's role as a global unit of account, while India and Brazil, among others, have sought to conduct more foreign trade in national currency.

    French officials believe such a discussion would be of a sufficiently long-term nature to be unthreatening to the United States, while providing political cover for China, which has two-thirds of its reserves in dollars, to inch forward in letting the yuan appreciate.

    Beijing is keen to diversify its holdings and reduce its dollar dependence over time without precipitating a sharp fall in the U.S. currency that could destabilize the international financial system and devalue its own assets.

    It could also provide political cover for European countries to accept an inevitable reduction in their representation at the IMF to make room for the emerging economies, and possibly pool the euro zone's seats at the table.

    "If the French can declare at the end of their year in the chair that they have laid the foundations of a new international monetary order and advanced the reform of the IMF, it will be a success for Sarkozy," said an expert advising Paris on its G20 presidency, who spoke on condition of anonymity.

    HEAVYWEIGHT CHALLENGER

    It would also help Sarkozy wrest ownership of financial reform from IMF Managing Director Dominique Strauss-Kahn, a potential Socialist contender for the French presidency in 2012.

    The IMF is working on new lending instruments for economies hit by crises not of their own making, such as a precautionary credit line for good performers, meant to discourage emerging economies from accumulating excessive currency reserves.

    For domestic reasons, Sarkozy does not want Strauss-Kahn -- a former French finance minister -- to be credited as the savior of the world economy.

    There are many possible pitfalls in Sarkozy's path.

    The United States may refuse to go along with any discussion of currencies in the G20. European partners such as Germany and Britain may also prove unhelpful.

    China, India and Russia may decline to take greater responsibility for unwinding financial imbalances which they feel are not their fault.

    Further spasms in the euro zone debt crisis and a weak economic recovery may undermine Europe's ability to set the agenda. But that won't stop Sarkozy trying to set a Gallic stamp on the international financial system.
     
  10. SHASH2K2

    SHASH2K2 New Member

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    Currency wars set to break out as volatility grows

    GET set for an outbreak of currency wars with the potential to shake global confidence as markets move towards the volatile October period.

    The long-standing debate between China and the US is again at a flashpoint, while Japan is aggrieved that China's central bank is pushing up the value of the yen.

    The investors' flight from the euro may also gather speed under renewed concerns over the sovereign risk.

    The Australian dollar, which is being pushed higher as investors assess the strength of Australia's economy and the prospect of further rate rises, is set to be buffeted by changing market assessments of risk.

    A confluence of international meetings over the next six weeks will elevate market concerns into the political domain.

    The International Monetary Fund is meeting in Washington early next month, followed by the G20 finance ministers and central bank governors later in the month, and the G20 leaders' summit in Korea in early November.
    The forthcoming mid-term elections in the US, which may see the Republicans seize control of both chambers, are also raising the political temperature.

    President Barack Obama last week sent the head of his national council of economic advisers, Larry Summers, to Beijing to discuss US concerns over China's currency.

    He was greeted by Hu Jintao, who normally does not talk to anyone less important than a head of state, but any hopes of a breakthrough were dispatched by a Foreign Affairs spokeswoman declaring: "Our exchange rate reform can't be pressed ahead under external pressure."

    An attendee at a G20 meeting of finance ministry and central bank officials in Korea last week says the US and China appeared to be headed for a clash, with little sign at the meeting of compromise on either side.

    On the eve of the last G20 summit, held in Toronto in June, China defused a crisis by announcing it would abandon its rigid peg to the US dollar in favour of a return to a managed peg against a basket of currencies. However, after an initial rise of about 0.4 per cent, the renminbi then retraced half the move.

    Westpac chief currency strategist Robert Rennie says the US may be underestimating Chinese irritation with the US Federal Reserve, which announced a fresh bout of quantitative easing shortly after the G20 summit.

    "China doesn't like quantitative easing and what it does to the dollar, and there is a sense of frustration from China that this was outside the background gentlemen's agreement."

    However, Democrat congressmen are in search of scapegoats for the continuing malaise in the US economy and China is an inviting target. Although the US monthly trade deficit reported last week was slightly smaller than previously, there was no change in its monthly deficit with China, which, at $US26 billion, was the second biggest since the financial crisis. The cry that the "Chinese are taking our jobs" is going up in US industries ranging from solar panels to aluminium.

    The US is under pressure to retaliate, with its Department of Commerce maintaining the option of declaring China a currency manipulator. However, there are concerns within the US administration about China's reaction to any such move.

    The US is annoyed that Australia will not back its campaign to get China to raise the value of the renminbi, believing its case would be strengthened if it could rally more allies. However, Treasury does not believe a revaluation of the Chinese currency would achieve much. It holds that China's surpluses are the result of it saving more than it invests. Australian officials say it is more productive to encourage the Chinese to improve social safety nets so that individuals have less need to self-insure, and note that Beijing is taking some steps in this direction.

    China is also under pressure from Japan. As part of its campaign of diversifying its holdings of foreign reserves away from the US dollar, the Chinese central bank has been buying Japanese government bonds, adding to the upward pressure on the yen.

    As with the US, Japan is also under political pressure to do something and a weakened government makes its response unpredictable. "While China can buy Japanese bonds, Japan can't buy Chinese government bonds using its foreign reserves. I feel that's unnatural," Finance Minister Hoshihiko Noda said last week.

    The yen rose to a 15-year high against the US dollar last week, and a nine-year high against the euro. In the perverse world of foreign exchange, the prospect of deflation in Japan, and the evident reluctance of the Bank of Japan to embark on forceful quantitative easing to avert it, makes the yen an attractive safe haven. In a deflationary world, a given amount of currency buys ever more goods.

    The Swiss franc is also suffering safe-haven inflows on fears of deflation, hitting a record high against the euro last week. The Swiss National Bank suffered paper losses equivalent to about $15bn trying to stop the rise of the currency earlier this year.

    The Australian dollar also touched a record high against the euro last week. However, it is fast money coming here rather than refugee investors in search of a safe haven.

    The Australian dollar, like equities, remains the risk-seeker's play. If you think the world economic recovery is going to stabilise and that the Asian region will retain healthy growth through 2011, then the Australian dollar will do well. Another assault at parity with the US dollar would be in the offing.
     
  11. SHASH2K2

    SHASH2K2 New Member

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    China Trade Surplus Reignites Tensions Over the Yuan

    China in August posted its third straight trade surplus of more than $20 billion, putting friction with the United States over the nation's currency back in the spotlight.

    Exports rose 34.4% in August and imports climbed a greater-than-expected 35.2%, leaving the country with a $20.03 billion surplus, a customs bureau report showed Friday.

    But a sustained trade gap with the United States could embolden American lawmakers who are pushing to penalize China for what they consider unfair trade practices.


    "Strong export growth and high trade surpluses weaken the argument that China cannot cope with currency appreciation," Brian Jackson, an emerging markets strategist at Royal Bank of Canada in Hong Kong told Bloomberg News. August imports "point to solid domestic demand," he also said.

    The debate over China's currency is nothing new. U.S. policymakers have long asserted that Beijing deliberately keeps the yuan undervalued to boost its exports and give its manufacturers an unfair advantage. After re-pegging its currency to the dollar in 2008, China earlier this year attempted to placate its critics by ending the peg and allowing yuan to modestly appreciate.

    However, the currency hasn't moved fast enough for many U.S. policymakers. It's risen less than 1% against the dollar since June 19, when Beijing announced it would end the peg.

    Even still, the yuan has managed to reach a new high against the greenback, as the People's Bank of China (BOC) set the currency's daily fixing at 6.7625 to the dollar Friday morning - its highest level since the central bank began publishing the daily fixing in 1994.

    Some analysts think Friday's move could mark the beginning of another spell of yuan appreciation against the dollar ahead of U.S. elections that could make Congress more likely to push trade legislation targeting China's currency policy.

    "We expect the Chinese to respond to growing U.S. pressure with another round of discrete and limited renminbi appreciation," Eurasia Group analysts Sean West and Nicholas Consonery wrote in a report this week.

    Still, it remains unlikely that the BOC, which has said large moves in the currency are out of the question, would do enough to satisfy its Washington critics.

    "It's important for China to let the market play a greater role in setting the exchange rate," Treasury Secretary Timothy F. Geithner said in an interview with Bloomberg Television. "We'd like to see them move more quickly."

    China's trade surplus in August actually shrank from July as imports picked up, but it was still the second-highest monthly surplus of the year. And most economists think the gap will widen again in the months ahead as a slowing economy drags on China's demand for imports.

    The House Ways and Means Committee is scheduled to discuss next week whether China has made "material progress" on the issue and debate what action Congress and the administration should take to address the nation's exchange-rate policy.

    However, Morgan Stanley Asia Chairman Stephen Roach said in an interview with Bloomberg that it would be a "huge mistake" for the U.S. to enact trade restrictions on China over the yuan, because too much pressure could spark retaliation in the form of China selling U.S. Treasuries.

    China's holdings of long-term Treasuries fell by $21.2 billion in June to $839.7 billion, a U.S. government report showed recently. Total Chinese investment in U.S. debt declined 2.8% to $843.7 billion, the smallest in a year, following a 3.6% slide in May.

    "With the yuan appreciating very slowly and U.S. mid-term elections drawing near, it's inevitable that Sino-U.S. tension will heat up again," Ken Peng, a Beijing-based economist at Citigroup Inc. (NYSE: C), told Bloomberg. "Chinese officials may face confrontations over the yuan" at meetings of the International Monetary Fund (IMF) and the Group of 20 nations (G20) in coming months, he added.
     
  12. SHASH2K2

    SHASH2K2 New Member

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    House panel cranks up pressure on China currency

    (Reuters) - A congressional panel turned up the pressure on China over the yuan on Friday, approving a bill that would let the United States slap duties on goods from countries with undervalued currencies.

    In a move likely to increase tension with China, the House of Representatives Ways and Means Committee sent the legislation to the full House for a vote next week. It may never become law, however, as it faces uncertain prospects in the Senate.

    The vote was a first step to fulfilling long-standing threats to penalize Beijing for keeping its currency artificially weak, which critics claim creates an unfair trade advantage. It came one day after President Barack Obama pressed Chinese Premier Wen Jiabao on the issue in talks on the sidelines of the U.N. General Assembly meeting.

    Top administration officials have stepped up criticism of China's currency practices, and Treasury Secretary Timothy Geithner said last week the issue would be a key agenda item at November's Group of 20 meeting.

    The move came less than six weeks before U.S. congressional elections dominated by concerns over the struggling economy and persistently high unemployment, and some Republicans accused Democrats of forcing a vote now for political gain.

    "Playing politics with an issue this serious is risky for American workers," said Republican Representative Kevin Brady, who added he was worried it could damage U.S. efforts to compete successfully in the growing China market.

    Critics inside and outside Congress claim that China has hurt U.S. exports and employment by undervaluing the yuan against the dollar by as much as 25 percent to 40 percent,

    Since China's central bank in June said it would let the yuan fluctuate more freely, it has risen 1.8 percent.

    House Ways and Means Committee Chairman Sander Levin, a Democrat, said the bill would give the United States new tools to address China's "currency manipulation" because diplomatic pressure has not yielded satisfactory results.

    'A DISTORTION'

    "China's persistent manipulation is a major distortion in the international marketplace," Levin said. China's undervalued currency "has a major impact on American workers and therefore American jobs. That's what this is really all about."

    The Obama administration has performed a cautious balancing act over the legislation. Senior U.S. officials have not publicly embraced it but neither have they sought to block it, leaving the door open for lawmakers to press ahead.

    "We will carefully examine any proposals put forward by Congress, but we have not taken a position on the legislation," a Treasury spokesman said after the committee vote.

    There have been expectations that if currency legislation were passed, China would likely challenge the measure at the World Trade Organization, exposing U.S. exports to trade retaliation if Beijing won the case.

    By conditioning its ultimate position on how well the bill stacks up with the WTO, the Obama administration left an escape route if it deems the legislation out of line with its diplomatic approach.

    In his meeting with Wen, Obama urged China to do more to move its currency toward a market-based exchange rate and Wen said Beijing planned to push ahead with reforms, said Jeffrey Bader, a senior adviser to Obama on Asian issues.

    Wen said earlier this week the exchange rate of the yuan against the dollar is not the main reason for the U.S. trade deficit with China.

    Levin told Reuters Insider he expected the House to pass the legislation on Wednesday. The Senate, which has competing proposals and a requirement for a 60-vote supermajority on controversial issues, has not made a commitment to bring up the issue before it adjourns for the year.

    In the foreign exchange markets, the panel's approval of the measure drew little reaction.

    "It will not have too much impact on currency markets," said John Doyle, senior currency strategist at Tempus Consulting in Washington. "It's more rhetorical."

    The bill amends U.S. trade law to essentially allow the U.S. Commerce Department to treat an undervalued currency as an export subsidy if certain criteria are met.

    The change adds a new subsidy -- persistent and fundamental currency undervaluation -- to the list of subsidies the U.S. Commerce Department can already offset with "countervailing duties."

    Ways and Means Committee aides said the bill does not guarantee the Commerce Department will apply countervailing duties against undervalued currencies, but removes an important hurdle.

    Under the bill, the Commerce Department would have to decide the precise amount of any undervaluation when presented a case. Commerce Department officials estimate that currently less than 3 percent of U.S. imports from China are hit with either countervailing or anti-dumping duties.

    That number is expected to rise if the "Currency Reform for Fair Trade" becomes law because the promise of potentially higher duties could encourage more U.S. companies to bear the cost of trade litigation to seek import relief.
     
  13. badguy2000

    badguy2000 Respected Member Senior Member

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    haha.come on.....stupid yankees.....those guys are sooo stupid that they got fool-youed by themself that a appreicated RMB be helpful to them.

    Just let RMB appreciate and USD devalued, then let us watch how yankee cry when they can not afford underwears
     
  14. Armand2REP

    Armand2REP CHINI EXPERT Veteran Member

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    They will buy it from Thailand and the Philippines. China is not the soul manufacturer nor are they the only ones that do it cheap. Same model applies to most products China produces.
     
  15. badguy2000

    badguy2000 Respected Member Senior Member

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    forget it!

    the simple fact is that most Yankee's job and education don't deserve their life quality and income.
    or In another word, their pain don't deserve their gain.

    In fact, not only USA,but also most EU countries(except Germany) are based on a hollow economy. Except a few product such as
    Boeing and arms, they hardly create real material wealth.

    one inevitable tendency is that the real average life quality of 1.0 billion people in west countries including USA is to go down while the real average life quality of 1.3 billion Chinese is to go up.

    Until 1.0 billion west people go down to be par with 1.3 billion Chinese, China's huge trade surplus won't stop.
     
    Last edited: Sep 25, 2010
  16. Daredevil

    Daredevil On Vacation! Administrator

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    Chinese are Sh!t scared about revaluing RMB versus dollar. Here is what Chinese premier Wen Jiabao says

    Jiabao warns 20% yuan gain will cause ‘major’ upheaval

     
  17. Armand2REP

    Armand2REP CHINI EXPERT Veteran Member

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    Now now, no reason to be jealous.

    They have a large sector service economy. That requires more brains than brawn. The Yankee higher education is ten times better than mainland China. When Chinese with domestic degrees come West they can't get a job. When Westerners go East, they are the first choice. Life in China is not hard if you have a Western education or know someone who will get you a job out of the factories. The problem is the Chinese education system is so bad, those with a domestic education are not qualified for the well paid jobs. The Chinese making all the money that aren't CCP cronies have degrees from Western universities and can be attested to by the sheer numbers of them that study overseas. The degrees are highly sought after in China.

    It comes right back to services, just because you don't see a value to it does not mean it has none. You can't have a healthy economy without it. The country you give the exception to is actually one of the larger service economies, 72% of GDP. The more developed you get, the more services will take up the percentages and agriculture and manufacture will be less important. The real money to be had is not in material items, but the services and software for those items.

    Lenovo builds a $500 laptop, the components cost $250, $200 of those made outside China. It costs $50 to ship, $100 to retail. The owner of that computer will spend $1000 in software not made in China. China gets revenue of $150 while the services outside make $1350. You get screwed by not getting in on the real money.

    If the life quality of Western countries goes down, Chinese trade surplus becomes trade deficit. This has already happened this year and if Chinese start consuming, it will do a 180 to where China is complaining. The West is tapped out for how much growth you can get out of exports. Chinese exports are still down 14% from its peak in 2008. The world hopes Chinese will get a better quality of life as consumption means better quality of life for everyone else. The cost of inflation in China is great, less and less can afford to consume. They are spending too much on housing, healthcare and food. One can only hope SOEs will start raising their wages as much as foreign companies are expected to.
     
  18. Rage

    Rage DFI TEAM Stars and Ambassadors

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    That's a load a nonsense. And your'e not answering the point.

    China is not the sole purveyor of low-cost labor.

    Capital, today, is liquid enough to travel anywhere. And there are several countries nearby who'd be happy to take the cake- Vietnam, Thailand, the Phillipines, Laos, Burma, Indonesia, and even India.

    China's huge trade surplus stops at the US Dollar. As Keynes once said, when you owe the bank $100,000 dollars, you have the problem, when you owe the bank $ 1 billion dollars, the bank has a problem.
     
  19. pmaitra

    pmaitra Moderator Moderator

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    I must say I have to agree on that to some extent.
     
  20. anoop_mig25

    anoop_mig25 Senior Member Senior Member

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    instead of doing all this type of stuffs simple americans should start demanding american made stuffs i know it would cost more but then americam currency would remain in american land itself. M.K. Gandhi ji`s kadhi movement is an eg. they should force their shopekeeper should forced to put american made stuff only.this protest should be quietly supported by governments agency . thsi simple stuff would in long term would american ecnomy as well as american people
     
  21. tony4562

    tony4562 Tihar Jail Banned

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    Yes, they can buy from Britain, or even better Switerland as well. They would only need to pay 10 times more. You still have not figure out that china's manufacturing advantage lies far beyond low cost or undervalued currency.
     

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