News / Asia

US Senate to Consider Bill Targeting Chinese Currency Practices

A view of the US Capitol in Washington (File Photo)
A view of the US Capitol in Washington (File Photo)
Michael Bowman

America’s extensive yet friction-laden economic relationship with China will be the focus of debate in the U.S. Senate this week, as it considers a bill to penalize Beijing for allegedly manipulating China’s currency, the yuan, to benefit domestic exports and disadvantage foreign imports.

China's export strategy

U.S. officials have long complained that China intentionally maintains an undervalued yuan as part of an aggressive - some might say predatory - export promotion strategy.

Timothy Geithner, U.S. Treasury Secretary (File Photo)
Timothy Geithner, U.S. Treasury Secretary (File Photo)

“China’s exchange rate policy is unfair, and hurts the interests of American producers,” said Timothy Geithner, U.S. Treasury Secretary.

A bill garnering bipartisan support in the Senate would treat currency manipulation as a foreign subsidy, triggering U.S. tariffs on Chinese goods.

'Illegal' measures

“China illegally subsidizes their industries," said Democratic Senator Charles Schumer of New York, who is a sponsor of the Currency Exchange Rate Oversight Reform Act.
"They underpay their workers. They skirt environmental regulations, and ignore the tenets of global trade rule after trade rule after trade rule. They get away with economic murder.”

Schumer says China’s currency practices have cost the United States more than two million jobs over the last decade.

Also backing the bill is Republican Senator Jeff Sessions of Alabama, who says it is time for the United States to defend its interests.

“During these tough economic times, we ought not to allow any of our trading partners to rig the game in their favor," he said. "It is the job of American officials to defend the just and fundamental interests of the American workforce.”

Trade worries

Some U.S. industries squeezed by Chinese competition have welcomed the bill. But 50 trade groups representing many of America’s most vibrant export industries have written a letter to Senate leaders arguing the legislation would invite Chinese retaliation and should be rejected.

Trade expert Dan Ikenson of the Washington-based Cato Institute agrees.

“If we do something unilateral, we risk U.S. export sales to China and the jobs that go with it,” said Ikenson.

He says the World Trade Organization would likely reject an American bid to treat currency manipulation as a subsidy. Beyond that, Ikenson says, the bill before the Senate demonstrates a fundamental misunderstanding of trade in an inter-dependent, globalized economy.

“It used to be the case that it was our producers against their producers," he added. "But now we have globalization, and there is a lot of value-added from different countries in products that we import from China, that are snapped together [assembled] in China, for example. So currency values cut in many different ways.”

Ikenson warns against sabotaging a vast and increasingly-lucrative export market for the United States, something highlighted by U.S. Treasury Secretary Geithner while testifying on Capitol Hill last year.

“China is now consuming more and importing more from the United States," he said. "As a result, China’s overall trade surplus has fallen sharply, by roughly half as a share of its economy. U.S. exports to China have rebounded much more rapidly than overall U.S. exports to the world.”

Chinese currency

A Chinese bank worker displays Chinese yuan at a bank in a Beijing (File Photo)
A Chinese bank worker displays Chinese yuan at a bank in a Beijing (File Photo)

The Obama administration says China’s currency remains undervalued, but has not endorsed the Senate bill. Chinese officials argue against politicizing trade issues, and point out that, in fact, the yuan has gradually appreciated in value since 2005.

That slow appreciation does not appear to satisfy U.S. lawmakers. With the 2012 general election looming, some legislators seem eager for a fight that will allow them to point fingers and assign blame for America’s economic woes.

Should the bill pass in the Democratic-led Senate, its enactment is far from certain. The Republican-controlled House of Representatives has not indicated it will take up the legislation.

You May Like

Tired of Waiting, South Africans Demand Change ‘Now’

With chronic poverty and lack of basic services largely fueling recent xenophobic attacks, many in Rainbow Nation say it’s time for government to act More

Challenges Ahead for China's Development Plans in Pakistan

Planned $46 billion in energy and infrastructure investments in Pakistan are aimed at transforming the country into a regional hub for trade and investment More

Audio 'Forbidden City' Revisits Little Known Era of Asian-American Entertainment

Little-known chapter of entertainment history captured in 80s documentary is revisited in new digitally remastered format and book 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.
Study: Insecticide Damaging Wild Bee Populationsi
X
April 24, 2015 10:13 PM
A popular but controversial type of insecticide is damaging important wild bee populations, according to a new study. VOA’s Steve Baragona has more.
Video

Video Study: Insecticide Damaging Wild Bee Populations

A popular but controversial type of insecticide is damaging important wild bee populations, according to a new study. VOA’s Steve Baragona has more.
Video

Video Data Servers Could Heat Private Homes

As every computer owner knows, when their machines run a complex program they get pretty hot. In fact, cooling the processors can be expensive, especially when you're dealing with huge banks of computer servers. But what if that energy could heat private homes? VOA’s George Putic reports that a Dutch energy firm aims to do just that.
Video

Video Cinema That Crosses Borders Showcased at Tribeca Film Festival

Among the nearly 100 feature length films being shown at this year’s Tribeca Film Festival in New York City are more than 20 documentaries and features with international appeal, from a film about a Congolese businessman in China, to documentaries shot in Pakistan and diaspora communities in the U.S., to a poetic look at disaffected South African youth. VOA’s Carolyn Weaver has more.
Video

Video UN Confronts Threat of Young Radicals

The radicalization and recruitment of young people into Islamist extremist groups has become a growing challenge for governments worldwide. On Thursday, the U.N. Security Council heard from experts on the issue, which has become a potent threat to international peace and security. VOA’s Margaret Besheer reports.
Video

Video Growing Numbers of Turks Discover Armenian Ancestry

In a climate of improved tolerance, growing numbers of people in Turkey are discovering their grandmothers were Armenian. Hundreds of thousands of Armenians escaped the mass deportations and slaughter of the early 1900's by forced conversion to Islam. Or, Armenian children were taken in by Turkish families and assimilated. Now their stories are increasingly being heard. Dorian Jones reports from Istanbul that the revelations are viewed as an important step.
Video

Video Migrants Trek Through Western Balkans to Reach EU

Migrants from Africa and other places are finding different routes into the European Union in search of a better life. The Associated Press followed one clandestine group to document their trek through the western Balkans to Hungary. Zlatica Hoke reports that the migrants started using that route about four years ago. Since then, it has become the second-most popular path into Western Europe, after the option of sailing from North Africa to Italy.
Video

Video TIME Magazine Honors Activists, Pioneers Seen as Influential

TIME Magazine has released its list of celebrities, leaders and activists, whom it deems the world’s “most influential” in 2015. VOA's Ramon Taylor reports from New York.
Video

Video US Businesses See Cuba as New Frontier

The Obama administration's opening toward Cuba is giving U.S. companies hope they'll be able to do business in Cuba despite the continuation of the U.S. economic embargo against the communist nation. Some American companies have been able to export some products to Cuba, but the recent lifting of Cuba's terrorism designation could relax other restrictions. As VOA's Daniela Schrier reports, corporate heavy hitters are lining up to head across the Florida Straits - though experts urge caution.
Video

Video Kenya Launches Police Recruitment Drive After Terror Attacks

Kenya launched a major police recruitment drive this week as part of a large-scale effort to boost security following a recent spate of terror attacks. VOA’s Gabe Joselow reports that allegations of corruption in the process are raising old concerns about the integrity of Kenya’s security forces.
Video

Video Japan, China in Race for Asia High-Speed Rail Projects

A lucrative competition is underway in Asia for billions of dollars in high-speed rail projects. Cambodia, India, Indonesia, Malaysia Thailand and Vietnam are among the countries planning to move onto the fast track. They are negotiating with Japan and the upstart Chinese who are locked in a duel to revolutionize transportation across Asia. VOA Correspondent Steve Herman in Bangkok has details.
Video

Video Scientists: Mosquitoes Attracted By Our Genes

Some people always seem to get bitten by mosquitoes more than others. Now, scientists have proved that is really the case - and they say it’s all because of genes. It’s hoped the research might lead to new preventative treatments for diseases like malaria, as Henry Ridgwell reports from London.
Video

Video Bible Museum Coming to Washington DC

Washington is the center of American political power and also home to some of the nation’s most visited museums. A new one that will showcase the Bible has skeptics questioning the motives of its conservative Christian funders. VOA religion correspondent Jerome Socolovsky reports.
Video

Video Armenia and Politics of Word 'Genocide'

A century ago this April, hundreds of thousands of Armenians of the Turkish Ottoman empire were deported and massacred, and their culture erased from their traditional lands. While broadly accepted by the U.N. and at least 20 countries as “genocide”, the United States and Turkey have resisted using that word to describe the atrocities that stretched from 1915 to 1923. But Armenians have never forgotten.
Video

Video Afghan First Lady Pledges No Roll Back on Women's Rights

Afghan First Lady Rula Ghani, named one of Time's 100 Most Influential, says women should take part in talks with Taliban. VOA's Rokhsar Azamee has more from Kabul.
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.

VOA Blogs