News / Asia

Chinese Yuan Rises to New High Against Dollar

TEXT SIZE - +

The Chinese currency has risen to a new high against the dollar, as U.S. lawmakers push to get tougher on China for what they say is an undervalued currency.

Since Beijing removed the yuan's peg to the U.S. dollar in June after pressure from its largest trading partners, the yuan has strengthened only by about one percent.

On Tuesday, the yuan reached its highest level against the dollar after China's central bank set the reference rate at 6.7378 to the dollar.

The yuan's surge in the past few days comes as several U.S. lawmakers, some facing re-election in November, push for tariffs on imports from China. They argue that the yuan is undervalued, making Chinese goods unfairly cheap, which forces U.S. industries to shut down, contributing to high joblessness.

U.S. officials have expressed frustration that China has not let the yuan appreciate. National Economic Council Director Lawrence Summers carried that message to Beijing last week when he met with Chinese President Hu Jintao and other senior officials.

"We have to wait and see what happens," said Andy Rothman, a market strategist in Shanghai for the investment bank CLSA Asia Pacific Markets, "but I think the initial signal from the Chinese government is, we hear Obama's message and will want to try to work with him on the political aspect of this problem."

U.S. Treasury Secretary Timothy Geithner testifies Thursday before a congressional committee on this issue. Some lawmakers have been disappointed that the Treasury Department refrained from calling China a currency manipulator in its past three reports. The next report will come out on October 15.

China's central bank only allows the yuan's value to move half a percent above or below its daily reference rate. China's trading partners argue its managed exchange rate causes global financial imbalances, because it sells more to the world than it imports.

China's trade surplus shrank 30 percent to $20 billion in August from July, but it was still the second-highest monthly surplus this year.

Chinese Premier Wen Jiabao, speaking through a translator, told the World Economic Forum in the northeastern Chinese city of Tianjin Monday that China is pursuing a more balanced trade flow.

"We do not pursue surplus in foreign trade. China runs a trade surplus with the United States and Europe, yet a trade deficit with Japan and the ROK [South Korea]," he said. "Our export growth is rapidly recovering, yet our imports have grown even faster. We cannot and will not pursue development with our door closed."

But some market analysts say if the global economy weakens, China may depreciate the yuan or keep it at a virtual peg to the dollar to protect exports. The U.S. economic recovery is slowing and budget woes are dragging down European demand.

China has always insisted it will take a gradual approach toward a more flexible exchange rate. Its banking authorities stress that the yuan's value should be viewed against its current standard, which is a basket of currencies including the euro, the Japanese yen, and not solely on its exchange rate with the dollar.

The dollar has weakened against other major currencies in the past several days. On Tuesday, it hit a new 15-year low against the Japanese yen, and it remains near a five-month low against the Australian dollar.

You May Like

Multimedia Relatives of South Korean Ferry Victims Fire at Authorities

46 people are confirmed dead, but some 250 remain trapped inside sunken ferry More

War Legacy Haunts Vietnam, US Relations

$84 million project aims to clean up soil contaminated by Agent Orange More

Wikipedia Proves Useful for Tracking Flu

Technique gave better results than Center for Disease Control (CDC) and Google’s Flu Trends 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.
Ukraine, Russia, United in Faith, Divided in Politicsi
X
Michael Eckels
April 19, 2014
There is a strong historical religious connection between Russia and Ukraine. But what role is religion playing in the current conflict? In the run-up to Easter, Michael Eckels in Moscow reports for VOA.
Video

Video Ukraine, Russia, United in Faith, Divided in Politics

There is a strong historical religious connection between Russia and Ukraine. But what role is religion playing in the current conflict? In the run-up to Easter, Michael Eckels in Moscow reports for VOA.
Video

Video Face of American Farmer is Changing

The average American farmer is now 58 years old, and farmers 65 and older are the fastest growing segment of the population. It’s a troubling trend signaling big changes ahead for American agriculture as aging farmers retire. Reporter Mike Osborne says a new report from the U.S. Census Bureau is suggesting what some of those changes might look like... and why they might not be so troubling.
Video

Video Donetsk Governor: Ukraine Military Assault 'Delicate But Necessary'

Around a dozen state buildings in eastern Ukraine remain in the hands of pro-Russian protesters who are demanding a referendum on self-rule. The governor of the whole Donetsk region is among those forced out by the protesters. He spoke to VOA's Henry Ridgwell from his temporary new office in Donetsk city.
Video

Video Drones May Soon Send Data From High Seas

Drones are usually associated with unmanned flying vehicles, but autonomous watercraft are also becoming useful tools for jobs ranging from scientific exploration to law enforcement to searching for a missing airliner in the Indian Ocean. VOA’s George Putic reports on sea-faring drones.
Video

Video New Earth-Size Planet Found

Not too big, not too small. Not too hot, not too cold. A newly discovered planet looks just right for life as we know it, according to an international group of astronomers. VOA’s Steve Baragona has more.
Video

Video Copts in Diaspora Worry About Future in Egypt

Around 10 percent of Egypt’s population belong to the Coptic faith, making them the largest Christian minority in the Middle East. But they have become targets of violence since the revolution three years ago. With elections scheduled for May and the struggle between the Egyptian military and Islamists continuing, many Copts abroad are deeply worried about the future of their ancient church. VOA religion correspondent Jerome Socolovsky visited a Coptic church outside Washington DC.
Video

Video Critics Say Venezuelan Protests Test Limits of Military's Support

During the two months of deadly anti-government protests that have rocked the oil-rich nation of Venezuela, President Nicolas Maduro has accused the opposition of trying to initiate a coup. Though a small number of military officers have been arrested for allegedly plotting against the government, VOA’s Brian Padden reports the leadership of the armed forces continues to support the president, at least for now.
Video

Video More Millenials Unplug to Embrace Board Games

A big new trend in the U.S. toy industry has more consumers switching off their high-tech gadgets to play with classic toys, like board games. This is especially true among the so-called millenial generation - those born in the 1980's and 90's. Elizabeth Lee has more from an unusual café in Los Angeles, where the new trend is popular and business is booming.
Video

Video Google Buys Drone Company

In its latest purchase of high-tech companies, Google has acquired a manufacturer of solar-powered drones that can stay in the air almost indefinitely, relaying broadband Internet connection to remote areas. It is seen as yet another step in the U.S. based Web giant’s bid to bring Internet to the whole world. VOA’s George Putic reports.
AppleAndroid