News / Asia

US Fed Chief Says China Monetary Policy 'Counterproductive'

Multimedia

U.S. Federal Reserve Chairman Ben Bernanke sparred with lawmakers Wednesday, defending his $600-billion bond-buying program as necessary to reduce the nation's high unemployment.  But his most pointed comments were aimed across the Pacific at China's recent interest rate hike.  In his first congressional hearing since Republicans took control of the House of Representatives last month, Bernanke applied pressure on China to raise the value of its currency.

In a hearing dominated by Republican attacks against the Federal Reserve's domestic monetary policy, Fed chief Ben Bernanke took the opportunity to give his most biting criticism yet of China's undervalued currency.

Democratic Congressman Tim Ryan opened the door by asking the Fed chief whether the undervalued renminbi was affecting the recovery in the United States.

"You still believe the Chinese are manipulating their currency, and if they are, is that fueling the inflation in China and how is the manipulation of Chinese currency affecting our ability to recover here in the United States,"  asked Ryan.

"The renminbi is undervalued," said Bernanke. "It would be both in our interest and in Chinese interest for them to raise the value of their currency.  And it would help them with their inflation problem."

China raised its interest rates this week for the third time in four months in an effort to cool-down its fast growing economy.

Chinese consumers, who celebrated the Chinese Lunar New year this week, have been hit especially hard by rising food prices.

"The fruit price is increasing very quickly," said a Beijing resident. "I don't normally spend so much money for food during the holiday.  I really feel the pressure this year, everything is getting so expensive this year."

Bernanke slammed Beijing's anti-inflation efforts as "counterproductive".  

Instead of raising interest rates to bring down consumer demand, Bernanke says it would be wiser for the Chinese government to reduce exports and allow its domestic market to grow.   

China has promised to allow the renminbi to appreciate but Beijing insists change must be gradual.

Critics argue China undervalues its currency to gain a competitive advantage in world markets.

"And it seems like a better strategy would be to let domestic demand be what it is and let people enjoy a higher standard of living in China and reduce their exports via a higher exchange rate," said Bernanke.

Inflation in China has risen at its fastest pace in more than two years - to about five percent.    

In contrast, U.S. inflation remains well below the central bank's target of two percent, with key interest rates at record lows to encourage spending.

You May Like

Polls Open in Scotland Independence Vote

As race to persuade undecided voters continues, 'No' voters say they believe life in Scotland will slowly improve, 'Yes' vote not worth the risk More

China to Invest $20 billion In India Amid Border Dispute

Border spat between armies of two countries in Himalayas underlines mutual tensions despite growing commercial ties highlighted by Xi Jinping's high profile visit More

Ukrainian Activist in Despair About Future of Her Country

IrIna Dovgan, accused of being a spy and tortured by pro-Russian separatists, is appealing to UN Human Rights Council to support her country 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.
A Dinosaur Fit for Land and Wateri
X
September 17, 2014 8:44 PM
Residents and tourists in Washington D.C. can now examine a life-size replica of an unusual dinosaur that lived almost a hundred million years ago in northern Africa. Scientists say studying the behemoth named Spinosaurus helps them better understand how some prehistoric animals adapted to life on land and in water. The Spinosaurus replica is on display at the National Geographic museum. VOA’s George Putic has more.
Video

Video A Dinosaur Fit for Land and Water

Residents and tourists in Washington D.C. can now examine a life-size replica of an unusual dinosaur that lived almost a hundred million years ago in northern Africa. Scientists say studying the behemoth named Spinosaurus helps them better understand how some prehistoric animals adapted to life on land and in water. The Spinosaurus replica is on display at the National Geographic museum. VOA’s George Putic has more.
Video

Video Iraqi Kurdistan Church Helps Christian Children Cope find shelter in churches in the Kurdish capital, Irbil

In the past six weeks, tens of thousands of Iraqi Christians have been forced to flee their homes by Islamic State militants and find shelter in churches in the Kurdish capital, Irbil. Despite U.S. airstrikes in the region, the prospect of people returning home is still very low and concerns are starting to grow over the impact this is having on the displaced youth. Sebastian Meyer reports from Irbil on how one church is coping.
Video

Video NASA Picks Boeing, SpaceX to Carry Astronauts Into Space

The U.S. space agency, NASA, has chosen Boeing and SpaceX companies to build the next generation of spacecraft that will carry U.S. astronauts to the International Space Station by the year 2017. The deal with private industry enables NASA to end its dependence on Russia to send space crews into low Earth orbit and back. Zlatica Hoke has more.
Video

Video Future of Ukrainian Former President's Estate Uncertain

More than six months after Ukraine's former President Viktor Yanukovych fled revolution to Russia, authorities have yet to gain control of his palatial estate. Protesters occupy the grounds and opened it to tourists but they are also refusing to turn it over to the state. VOA's Daniel Schearf reports from Mezhigirya, just north of Kyiv.
Video

Video China Muslims Work to Change Perceptions After Knife Attacks

China says its has sentenced three men to death and one woman to life in prison for a deadly knife attack in March that left more than 30 dead and 140 injured. Beijing says Muslim militants from China's restive western region of Xinjiang carried out the attacks. Now, more than six months after the incident, residents in the city are still coping with the aftermath. VOA's Bill Ide has more from Kunming.
Video

Video Enviropreneur Seeks to Save the Environment, Empower the Community

Lorna Rutto, a former banker, is now an ‘enviropreneur’ - turning plastic waste into furniture and fences discusses the challenges she faces in Africa with raw materials and the environment.
Video

Video West Trades Accusations Over Ransoms

As world leaders try to forge a common response to the threat posed by Islamic State militants in Iraq and Syria, there is simmering tension over differing policies on paying ransoms. In the past month, the jihadist group has beheaded two Americans and one Briton. Both countries refuse to pay ransom money. As Henry Ridgwell reports for VOA from London, there is uncertainty in the approach of some other European nations.
Video

Video Scotland Independence Bid Stokes Global Interest

The people of Scotland are preparing to vote on whether to become independent and break away from the rest of Britain, in a referendum being watched carefully in many other countries. Some see it as a risky experiment; while others hope a successful vote for independence might energize their own separatist demands. Foreign immigrants to Scotland have a front row seat for the vote. VOA’s Henry Ridgwell spoke to some of them in Edinburgh.


Carnage and mayhem are part of daily life in northern Nigeria, the result of a terror campaign by the Islamist group Boko Haram. Fears are growing that Nigeria’s government may not know how to counter it, and may be making things worse. More

AppleAndroid