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| China-Japan-Koreas | |
| US calls for immediate flexibility on Chinese currency rate | |
| 2005-04-16 | |
| The US administration is calling for China to move immediately to introduce a flexible currency, a marked shift in tactics after several years of patient diplomacy aimed at nudging China towards allowing the renminbi to float. A senior US administration official told the Financial Times on Friday: "Action is needed now. This is a co-ordinated effort to get the message across." The decision to demand prompt action by Beijing comes in the face of growing pressure from the US Congress over the burgeoning trade deficit with China.
Officials acknowledge they were shocked by a 67-33 Senate vote this month to allow consideration of a bill championed by Democratic senator Charles Schumer that would impose a 27.5 per cent tariff on all Chinese imports if China does not revalue in six months. There is also concern within the administration about possible House efforts to give the Commerce Department more say in the decision on whether China is manipulating its currency. The Treasury dismisses that threat to its authority. Rob Nichols, Treasury spokesman, said: "We are calling on China to move because it is the best thing for the global trading system." Another administration official said: "The US is viewed as the standard-bearer for open trade policies. Turning into isolationists would send a terrible signal to the global trading community." The message is being delivered to China at all levels in advance of this weekend's Group of Seven meeting in Washington. China, which has been a guest at the past two G7 meetings, is not sending its finance minister and central bank governor to the gathering. We can't HEAR you .... At the meeting of the Group of Seven finance ministers and central bankers in Washington, there is likely to be finger-pointing among those present on the actions needed to reduce global economic imbalances. President George W. Bush said on Thursday that he was pressing China "for floating her currency so we can have free and fair trade with China". John Snow, Treasury secretary, told Bloomberg News on Friday the "time has come" for China to move on the issue. "They are ready. They have prepared their financial system to live in a world of greater flexibility." Kristin Forbes, a member of the White House council of economic advisers, told a House committee on Thursday that China had taken several steps, with US support, to prepare for exchange rate flexibility. These steps include the development of foreign-exchange trading, and progress in restructuring state-owned banks. "The administration believes that now is the appropriate time for China to adopt a more flexible exchange rate regime," she said. "It is in China's best interest to adopt a more flexible currency now while economic growth is strong." A paper by the International Monetary Fund's Asia-Pacific department argues that China can move to currency flexibility now. | |
| Posted by:too true |
| #2 As in every other matter she negotiates, China will use this issue(chip)to bargan for other consessions from G7 nations. |
| Posted by: Cleamp Clise6483 2005-04-16 1:13:33 PM |
| #1 If China is going to do it, at the behest of every serious economist on the planet, including their own; and have long been preparing to take the hit, which they have also been advised to do; this would be the "heads-up" to the financial markets and the key players not to panic, prepare for major adjustment, and also to be ready to apply international braking if something seems to be running wild. |
| Posted by: Anonymoose 2005-04-16 12:42:02 PM |