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

Israelis Quietly Expand Enclave in Palestinian District of Jerusalem

Estimated 500 settlers, armed or protected by paramilitary police, live in Silwan among 50,000 Palestinians More

Video US, Iran Face Similar Challenges in Syrian Fight Against IS

Both Washington, Tehran back fighters battling Islamic State militants in Iraq -- but in Syria they support opposing sides in country’s civil war More

China Boosts Efforts to Help Afghan, Regional Stability

Observers say China’s increased regional involvement are due to concerns that Afghan instability and the presence of anti-China militants in Pakistani border areas could fuel Xinjiang troubles 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.
After Decades of Pressure, Luxembourg Drops Bank Secrecy Rulesi
X
October 21, 2014 12:20 AM
European Union finance ministers have reached a breakthrough agreement that will make it more difficult for tax cheats to hide their money. The new legislation, which had been blocked for years by countries with a reputation as tax havens, was approved last week after Luxembourg and Austria agreed to lift their vetoes. But as Mil Arcega reports, it doesn’t mean tax cheats have run out of places to keep their money hidden.
Video

Video After Decades of Pressure, Luxembourg Drops Bank Secrecy Rules

European Union finance ministers have reached a breakthrough agreement that will make it more difficult for tax cheats to hide their money. The new legislation, which had been blocked for years by countries with a reputation as tax havens, was approved last week after Luxembourg and Austria agreed to lift their vetoes. But as Mil Arcega reports, it doesn’t mean tax cheats have run out of places to keep their money hidden.
Video

Video Kobani Refugees Welcome, Turkey Criticizes, US Airdrop

Residents of Kobani in northern Syria have welcomed the airdrop of weapons, ammunition and medicine to Kurdish militia who are resisting the seizure of their city by Islamic State militants. The Turkish government, however, has criticized the operation. VOA’s Scott Bobb reports from southeastern Turkey, across the border from Kobani.
Video

Video China Political Meeting Seeks to Improve Rule of Law

China’s communist leaders will host a top level political meeting this week, called the Fourth Plenum, and for the first time in the party’s history, rule of law will be a key item on the agenda. Analysts and Chinese media reports say the meetings could see the approval of long-awaited measures aimed at giving courts more independence and include steps to enhance an already aggressive and high-reaching anti-corruption drive. VOA’s Bill Ide has more from Beijing.
Video

Video US ‘Death Cafes’ Put Focus on the Finale

In contemporary America, death usually is a topic to be avoided. But the growing “death café” movement encourages people to discuss their fears and desires about their final moments. VOA’s Jerome Socolovsky reports.
Video

Video Ebola Orphanage Opens in Sierra Leone

Sierra Leone's first Ebola orphanage has opened in the Kailahun district. Hundreds of children orphaned since the beginning of the Ebola outbreak face stigma and rejection with nobody to care for them. Adam Bailes reports for VOA about a new interim care center that's aimed at helping the growing number of children affected by Ebola.
Video

Video Young Nairobi Tech Innovator on 'Track' in Security Business

A 24-year-old technology innovator in Nairobi has invented a tracking device that monitors and secures cars. He has also come up with what he claims is the most robust audio-visual surveillance system yet. As Lenny Ruvaga reports from the Kenyan capital, his innovations are offering alternative security solutions.
Video

Video Latinas Converting to Islam for Identity, Structure

Latinos are one of the fastest growing groups in the Muslim religion. According to the Pew Research Center, about 6 percent of American Muslims are Latino. And a little more than half of new converts are female. VOA’s Carolyn Presutti travelled to Miami, Florida -- where two out of every three residents is Hispanic -- to learn more.
Video

Video Exclusive: American Joins Kurds' Anti-IS Fight

The United States and other Western nations have expressed alarm about their citizens joining Islamic State forces in Syria and Iraq. In a rare counterpoint to the phenomenon, an American has taken up arms with the militants' Syrian Kurdish opponents. Elizabeth Arrott has more in this exclusive profile by VOA Kurdish reporter Zana Omer in Ras al Ayn, Syria.
Video

Video South Korea Confronts Violence Within Military Ranks

Every able-bodied South Korean male between 18 and 35 must serve for 21 to 36 months in the country’s armed forces, depending upon the specific branch. For many, service is a rite of passage to manhood. But there are growing concerns that bullying and violence come along with the tradition. Reporter Jason Strother has more from Seoul.
Video

Video North Carolina Emerges as Key Election Battleground

U.S. congressional midterm elections will be held on November 4th and most political analysts give Republicans an excellent chance to win a majority in the U.S. Senate, which Democrats now control. So what are the issues driving voters in this congressional election year? VOA National Correspondent Jim Malone traveled to North Carolina, one of the most politically competitive states in the country, to find out.
Video

Video Comanche People Maintain Pride in Their Heritage

The Comanche (Indian nation) once were called the “Lords of the Plains,” with an empire that included half the land area of current day Texas, large parts of Oklahoma, New Mexico, Kansas and Colorado.The fierceness and battle prowess of these warriors on horseback delayed the settlement of most of West Texas for four decades. VOA’s Greg Flakus reports from Lawton, Oklahoma, that while their warrior days are over, the 15,000 members of the Comanche Nation remain a proud people.
Video

Video Turkey Campus Attacks Raise Islamic Radicalization Fears

Concerns are growing in Turkey of Islamic radicalization at some universities, after clashes between supporters of the jihadist group Islamic State (IS) or ISIS, and those opposed to the extremists. Pro-jihadist literature is on sale openly on the streets of Istanbul. Critics accuse the government of turning a blind eye to radicalism at home, while Kurds accuse the president of supporting IS - a charge strongly denied. Henry Ridgwell reports from London.

All About America

AppleAndroid