News / Asia

China's Currency Valuation Creates Focal Point Debate

China's Currency Valuation Creates Focal Point Debate
China's Currency Valuation Creates Focal Point Debate
Les Carpenter

U.S. Treasury Secretary Timothy Geithner is set to testify Thursday before the House Ways and Means Committee of the U.S. House of Representatives on China's alleged manipulation of its currency.  The committee Wednesday heard from a number of people, including economists, on possible proposals to push Beijing to stop the manipulation.  That brought responses from another group of economists.   

The congressmen heard that China undervalues it's currency, the Yuan, by as much as 40 percent to give its exported goods an unfair advantage on global markets.  The committee heard several suggestions of what can be done to encourage China to allow the Yuan to strengthen.  One was using retaliatory duties against China under World Trade Organization rules.  But, in a conference call with reporters after the congressional hearing, American Enterprise Institute economist Phillip Levy said that may not be such a good idea.

"The WTO's rules are not very clear on this point and the only way the U.S. could win such a case would be to have a creative and adventurous dispute settlement panel, the sort the US is usually against," said Phillip Levy. "And, of course, there is the persistent question that comes up by law every six months of whether China should be named a currency manipulator.  It's interesting to note that there is remarkably little business support for aggressive stances on Chinese currency.  This is not, by any means, because business is satisfied with China's economic practices or treatment, but when you look at thing like the American Chamber of Commerce in Shanghai's survey of businesses trying to operate in China...I believe the currency came in something like fifth in the order of their concerns...behind things like treatment of foreign investment and intellectual property protections.  so, I think there is some sentiment that's been expressed in the business community that this focus on currency is really a misdirection of U.S. efforts."

Phillip Levy's colleague, economist Desmond Lachman agreed that China's currency valuation is the center of the debate, but he also said he finds there are at least two other issues of equal or greater importance.

"One is that in addition to the currency issue, there's a whole range of non-tariff restrictions that China is resorting to give itself an unfair, competitive advantage on stuff like domestic innovation, stuff of that sort that make it difficult to compete fairly with China," said Desmond Lachman. "So, it's not just the currency issue. That last point I would like to make is that beyond the currency issue, what it's really got to be looking at the imbalance with China as a problem of saving and investment, that there's an imbalance on that score as long as China is saving at a high level you're gonna have this imbalance persisting.  And, we don't see much movement by China to take those measures that would boost domestic consumption that would lay the basis for bringing the global imbalances onto a sustainable path.'

Economist Desmond Lachman says the ideal policy would be for China to cooperate in hashing out a plan to reduce trade imbalances.  That could be done, he says, over a reasonable period of time with China increasing the value of its currency while the United States took measures to increase its household savings rate.  At the same time, Mr. Lachman says, China would have to take the measures needed to increase domestic consumption.  Without working together, he says, would just lead to a train wreck in the not too distant future.

You May Like

Kurdish President: More Needed to Defeat Islamic State

In interview with VOA's Persian Service, Massoud Barzani says peshmerga forces have not received weapons, logistical support needed to successfully fight IS in northern Iraq More

Sierra Leone's Stray Dog Population Doubles During Ebola Crisis

Many dog owners fear their pets could infect them with the virus and have abandoned them, leading to the increase and sparking fears of rabies More

Video New Brain Mapping Techniques Could Ease Chronic Pain

New methods for mapping pain in the brain not only validate sufferers of chronic pain but might someday also lead to better treatment More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
New Brain Mapping Techniques Could Ease Chronic Paini
X
Shelley Schlender
April 20, 2015 7:03 PM
Pain has a purpose - it can stop you from touching a flame or from walking on a broken leg. As an injury heals, the pain goes away. Usually. But worldwide, one out of every five people suffers from pain that lasts for months and years, leading to lost jobs, depression, and rising despair when medical interventions fail or health experts hint that a pain sufferer is making it up. From Boulder, Colorado, Shelley Schlender reports that new methods for mapping pain in the brain are providing validation for chronic pain and might someday guide better treatment.
Video

Video New Brain Mapping Techniques Could Ease Chronic Pain

From Boulder, Colorado, Shelley Schlender reports that new methods for mapping pain in the brain are providing validation for chronic pain and might someday guide better treatment.
Video

Video Hope, Prayer Enter Fight Against S. Africa Xenophobia

South Africa has been swept by disturbing attacks on foreign nationals. Some blame the attacks on a legacy of colonialism, while others say the economy is to blame. Whatever the cause, ordinary South Africans - and South African residents from around the world - say they're praying for the siege of violence to end. Anita Powell reports from Johannesburg.
Video

Video Italy Rescues Migrants After Separate Deadly Capsize Incident

Italy continued its massive search and rescue operation in the Mediterranean Monday for the capsized boat off the coast of Libya that was carrying hundreds of migrants, while at the same time rescuing Syrian migrants from another vessel off the coast of Sicily. Thirteen children were among the 98 Syrian migrants whose boat originated from Turkey on the perilous journey to Europe.
Video

Video New Test Set to Be Game Changer in Eradicating Malaria

The World Health Organization estimates 3.4 billion people are at risk of malaria, with children under the age of five and pregnant women being the most vulnerable. As World Malaria Day approaches (April 25), mortality rates are falling, and a new test -- well into the last stage of trials -- is having positive results in Kenya. Lenny Ruvaga reports for VOA from Nairobi.
Video

Video Are Energy Needs Putting Thailand's Natural Beauty at Risk?

Thailand's appetite for more electricity has led to the construction of new dams along the Mekong River to the north and new coal plants near the country's famous beaches in the south. A proposed coal plant in a so-called "green zone" has touched off a debate. VOA's Steve Sandford reports.
Video

Video Overwhelmed by Migrants, Italy Mulls Military Action to Stabilize Libya

Thousands more migrants have arrived on the southern shores of Italy from North Africa in the past two days. Authorities say they expect the total number of arrivals this year to far exceed previous levels, and the government has said military action in Libya might be necessary to stem the flow. VOA's Henry Ridgwell reports.
Video

Video Putin Accuses Kyiv of ‘Cutting Off’ Eastern Ukraine

Russian President Vladimir Putin, in his annual televised call-in program, again denied there were any Russian troops fighting in Ukraine. He also said the West was trying to ‘contain’ Russia with sanctions. Henry Ridgwell reports on reactions to the president’s four-hour TV appearance.
Video

Video Eye Contact Secures Dog's Place in Human Heart

Dogs serve in the military, work with police and assist the disabled, and have been by our side for thousands of years serving as companions and loyal friends. We love them. They love us in return. VOA’s Rosanne Skirble reports on a new study that looks at the bio-chemical bond that cements that human-canine connection.
Video

Video Ukrainian Volunteers Search for Bodies of Missing Soldiers

As the cease-fire becomes more fragile in eastern Ukraine, a team of volunteer body collectors travels to the small village of Savur Mohyla in the what pro-Russian separatists call the Donetsk Peoples Republic - to retrieve bodies of fallen Ukrainian servicemen from rebel-held territories. Adam Bailes traveled with the team and has this report.
Video

Video Xenophobic Violence Sweeps South Africa

South Africa, long a haven for African immigrants, has been experiencing the worst xenophobic violence in years, with at least five people killed and hundreds displaced in recent weeks. From Johannesburg, VOA’s Anita Powell brings us this report.
Video

Video Apollo 13, NASA's 'Successful Failure,' Remembered

The Apollo 13 mission in 1970 was supposed to be NASA's third manned trip to the moon, but it became much more. On the flight's 45th anniversary, astronauts and flight directors gathered at Chicago's Adler Planetarium to talk about how the aborted mission changed manned spaceflight and continues to influence space exploration today. VOA’s Kane Farabaugh reports.
Video

Video Badly Burned Ukrainian Boy Bravely Fights Back

A 9-year-old Ukrainian boy has returned to his native country after intensive treatment in the United States for life-threatening burns. Volodia Bubela, burned in a house fire almost a year ago, battled back at a Boston hospital, impressing doctors with his bravery. Faith Lapidus narrates this report from VOA's Tetiana Kharchenko.
Video

Video US Maternity Leave Benefits Much Less Than Many Countries

It was almost 20 years ago that representatives of 189 countries met at a UN conference in Beijing and adopted a plan of action to achieve gender equality around the world. Now, two decades later, the University of California Los Angeles World Policy Analysis Center has issued a report examining what the Beijing Platform for Action has achieved. From Los Angeles, Elizabeth Lee has more.
Video

Video Endangered Hawaiian Birds Get Second Chance

Of the world's nearly 9,900 bird species, 13 percent are threatened with extinction, according to BirdLife International. Among them are two Hawaiian honeycreepers - tiny birds that live in the forest canopy, and, as the name implies, survive on nectar from tropical flowers. Scientists at the San Diego Zoo report they have managed to hatch half a dozen of their chicks in captivity, raising hopes that the birds will flutter back from the brink of extinction. VOA’s George Putic reports.
Video

Video Exhibit Brings Renaissance Master Out of the Shadows

The National Gallery of Art in Washington has raised the curtain on one of the most intriguing painters of the High Renaissance. Mostly ignored after his death in the early 1500s, Italian master Piero di Cosimo is now claiming his place alongside the best-known artists of the period. VOA’s Ardita Dunellari reports.

VOA Blogs