News / Asia

Chinese Yuan Rises to New High Against Dollar

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

Turbulent Transition Imperils Tunisia’s Arab Spring Gains

Critics say new anti-terrorism laws worsen Tunisia's situation while others put faith in country’s vibrant civil organizations, women’s movement More

Burundi’s Political Crisis May Become Humanitarian One

United Nations aid agencies issue warning as deadly violence sends tens of thousands fleeing More

Yemenis Adjust to Life Under Houthi Rule

Locals want warring parties to strike deal to stop bloodletting before deciding how country is governed 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.
Seoul Sponsors Korean Unification Fairi
X
Brian Padden
May 29, 2015 1:27 PM
With inter-Korean relations deteriorating over the North’s nuclear program, past military provocations and human rights abuses, many Koreans still hold out hope for eventual peaceful re-unification. VOA’s Brian Padden visited a “unification fair” held this week in Seoul, where border communities promoted the benefits of increased cooperation.
Video

Video Seoul Sponsors Korean Unification Fair

With inter-Korean relations deteriorating over the North’s nuclear program, past military provocations and human rights abuses, many Koreans still hold out hope for eventual peaceful re-unification. VOA’s Brian Padden visited a “unification fair” held this week in Seoul, where border communities promoted the benefits of increased cooperation.
Video

Video Purple Door Coffeeshop: Changing Lives One Cup at a Time

For a quarter of his life, Kevin Persons lived on the street. Today, he is working behind the counter of an espresso bar, serving coffee and working to transition off the streets and into a home. Paul Vargas reports for VOA.
Video

Video Modular Robot Getting Closer to Reality

A robot being developed at Carnegie Mellon University has evolved into a multi-legged modular mechanical snake, able to move over rugged surfaces and explore the surroundings. Scientists say such machines could someday help in search and rescue operations. VOA’s George Putic reports.
Video

Video Shanghai Hosts Big Consumer Electronics Show

Electronic gadgets are a huge success in China, judging by the first Asian Consumer Electronics Show, held this week in Shanghai. Over the course of two days, more than 20,000 visitors watched, tested and played with useful and some less-useful electronic devices exhibited by about 200 manufacturers. VOA’s George Putic has more.
Video

Video Forced to Return Home, Afghan Refugees Face Increased Hardship

Undocumented refugees returning to Afghanistan from Pakistan have no jobs, no support system, and no home return to, and international aid agencies say they and the government are overwhelmed and under-resourced. Ayesha Tanzeem has more from Kabul.
Video

Video Britain Makes Controversial Move to Crack Down on Extremism

Britain is moving to tighten controls on extremist rhetoric, even when it does not incite violence or hatred -- a move that some are concerned might unduly restrict basic freedoms. It is an issue many countries are grappling with as extremist groups gain power in the Middle East, fueled in part by donations and fighters from the West. VOA’s Al Pessin reports from London.
Video

Video 3D Printer Makes Replica of Iconic Sports Car

Cars with parts made by 3D printers are already on the road, but engineers are still learning about this new technology. While testing the possibility of printing an entire car, researchers at the U.S. Department of Energy recently created an electric-powered replica of an iconic sports roadster. VOA’s George Putic has more.
Video

Video Al-Shabab Recruitment Drive Still on In Kenya

The al-Shabab militants that have long battled for control of Somalia also have recruited thousands of young people in Kenya, leaving many families disconsolate. Mohammed Yusuf recently visited the Kenyan town of Isiolo, and met with relatives of those recruited, as well as a many who have helped with the recruiting.
Video

Video A Small Oasis on Kabul's Outskirts Provides Relief From Security Tensions

When people in Kabul want to get away from the city and relax, many choose Qargha Lake, a small resort on the outskirts of Kabul. Ayesha Tanzeem visited and talked with people about the precious oasis.
Video

Video Kenyans Lament Losing Sons to al-Shabab

There is agony, fear and lost hope in the Kenyan town of Isiolo, a key target of a new al-Shabab recruitment drive. VOA's Mohammed Yusuf visits Isiolo to speak with families and at least one man who says he was a recruiter.
Video

Video Scientists Say Plankton More Important Than Previously Thought

Tiny ocean creatures called plankton are mostly thought of as food for whales and other large marine animals, but a four-year global study discovered, among other things, that plankton are a major source of oxygen on our planet. VOA’s George Putic reports.
Video

Video Kenya’s Capital Sees Rise in Shisha Parlors

In Kenya, the smoking of shisha, a type of flavored tobacco, is the latest craze. Patrons are flocking to shisha parlors to smoke and socialize. But the practice can be addictive and harmful, though many dabblers may not realize the dangers, according to a new review. Lenny Ruvaga has more on the story for VOA from Nairobi, Kenya.

VOA Blogs