Obama urged to act on China's currency manipulation

[Bumper64]

Washington Post Foreign Service

Friday, March 26, 2010

Pressure is mounting on the Obama administration to take action against China for undervaluing its currency, with business leaders, economists and other analysts citing the issue as emblematic of a broader tension developing in one of the world's central trading relationships.

The Treasury Department on April 15 will issue a semiannual report on the management of currencies around the world in which it will have to decide whether China manipulates its exchange rates "for purposes . . . of gaining unfair competitive advantage in international trade." China maintains a strict peg between the value of the renminbi, its currency, and the U.S. dollar, and there is broad agreement that the rate is lower than it would be if the currency traded openly -- perhaps by as much as 25 percent, making Chinese goods that much cheaper on global markets.

In two prior reports since President Obama took office, the department shied away from making such a declaration, hesitant to provoke a trade dispute as both countries were responding to the global economic downturn. Instead, officials folded the currency question into the administration's larger aim of resolving issues through negotiation and engagement in international organizations, such as the Group of 20 economically powerful countries.

But a year later, the economic landscape has shifted. China's exports have rebounded, and its economy is growing strongly enough that U.S. officials think the country needs to shift away from the export-dominated strategies that have fueled its growth.

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http://www.washingtonpost.com/wp-dyn/content/article/2010/03/25/AR2010032503772.html

[Unitedrich]

Great information Bumper64. I have felt that China has been up to something behind the scenes for a while now.