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

UN Fears Rights Violations in China-backed Projects

UNHCHR investigates link between financing development and ignoring safeguards for human rights More

Boko Haram Violence Tests Nigerians’ Faith in Buhari

New president has promised to stem insurgency; he’s scheduled to meet with President Obama at White House July 20 More

Social Media Network Wants Privacy in User’s Hands

Encryption's popularity in messaging is exploding; now it's the foundation of a new social network 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.
Making Music, Fleeing Bombs: New Film on Sudan’s Internal Refugeesi
X
Carolyn Weaver
July 06, 2015 6:47 PM
In 2012, Sudanese filmmaker Hajooj Kuka went to make a documentary among civil war refugees in Sudan’s Blue Nile and Nuba Mountains region. What he found surprised him: music was helping to save people from bombing raids by their own government. VOA’s Carolyn Weaver has more.
Video

Video Making Music, Fleeing Bombs: New Film on Sudan’s Internal Refugees

In 2012, Sudanese filmmaker Hajooj Kuka went to make a documentary among civil war refugees in Sudan’s Blue Nile and Nuba Mountains region. What he found surprised him: music was helping to save people from bombing raids by their own government. VOA’s Carolyn Weaver has more.
Video

Video Rice Farmers Frustrated As Drought Grips Thailand

A severe drought in Thailand is limiting the growing season of the country’s important rice crop. Farmers are blaming the government for not doing more to protect a key export. Steve Sandford reports from Chiang Mai, Thailand.
Video

Video 'From This Day Forward' Reveals Difficult Journey of Transgender Parent

In her documentary, "From This Day Forward", filmmaker Sharon Shattuck reveals the personal journey of her transgender father, as he told his family that he always felt he was a woman inside and decided to live as one. VOA’s Penelope Poulou has more.
Video

Video Floodwaters Threaten Iconic American Home

The Farnsworth House in the Midwest State of Illinois is one of the most iconic homes in America. Thousands of tourists visit the site every year. Its location near a river inspired the design of the house, but, as VOA’s Kane Farabaugh reports, that very location is now threatening the existence of this National Historic Landmark.
Video

Video Olympics Construction Scars Sacred Korean Mountain

Environmentalists in South Korea are protesting a Winter Olympics construction project to build a ski slope through a 500-year-old protected forest. Brian Padden reports that although there is strong national support for hosting the 2018 Pyeongchang Winter Olympics, there are growing public concerns over the costs and possible ecological damage at the revered mountain.
Video

Video Xenophobia Victims in South Africa Flee Violence, Then Return

Many Malawians fled South Africa early this year after xenophobic attacks on African immigrants. But many quickly found life was no better at home and have returned to South Africa – often illegally and without jobs, and facing the tough task of having to start over. Lameck Masina and Anita Powell file from Johannesburg.
Video

Video Family of American Marine Calls for Release From Iranian Prison

As the crowd of journalists covering the Iran talks swells, so too do the opportunities for media coverage.  Hoping to catch the attention of high-level diplomats, the family of American-Iranian marine Amir Hekmati is in Vienna, pleading for his release from an Iranian prison after nearly 4 years.  VOA’s Heather Murdock reports from Vienna.
Video

Video UK Holds Terror Drill as MPs Mull Tunisia Response

After pledging a tough response to last Friday’s terror attack in Tunisia, which came just days before the 10th anniversary of the bomb attacks on London’s transport network, British security services are shifting their focus to overseas counter-terror operations. VOA's Henry Ridgwell has more.
Video

Video Obama on Cuba: This is What Change Looks Like

President Barack Obama says the United States will soon reopen its embassy in Cuba for the first time since 1961, ending a half-century of isolation. VOA White House correspondent Luis Ramirez reports.
Video

Video Hate Groups Spread Influence Via Internet

Hate groups of various kinds are using the Internet for propaganda and recruitment, and a Jewish human rights organization that monitors these groups, the Simon Wiesenthal Center, says their influence is growing. The messages are different, but the calls to hatred or violence are similar. VOA's Mike O’Sullivan reports.
Video

Video Blind Somali Journalist Defies Odds in Mogadishu

Despite improving security in the last few years, Somalia remains one of the most dangerous countries to be a journalist – even more so for someone who cannot see. Abdulaziz Billow has the story of journalist Abdifatah Hassan Kalgacal, who has been reporting from the Somali capital for the last decade despite being blind.
Video

Video Rabbi Hits Road to Heal Jewish-Muslim Relations in France

France is on high alert after last week's terrorist attack near the city Lyon, just six months after deadly Paris shootings. The attack have added new tensions to relations between French Jews and Muslims. France’s Jewish and Muslim communities also share a common heritage, though, and as far as one French rabbi is concerned, they are destined to be friends. From the Paris suburb of La Courneuve, Lisa Bryant reports about Rabbi Michel Serfaty and his friendship bus.

VOA Blogs