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It's Official: China Is NOT a Currency Manipulator

News flash. China is not a currency manipulator. Source: the same guy who said China was a currency manipulator just two months ago.

This is another sign of the emerging China policy of the Obama administration: Go soft on Beijing. We need these guys. And it's not just the administration. Remember the Schumer-Graham bill that threatened a 27.5 percent tariff on Chinese goods if China didn't revalue the currency and fast? It's nowhere to be found.

In the Treasury Department's semi-annual Report to Congress on International Economic and Exchange Rate Policies, China's currency was deemed "overvalued." But Treasury Secretary Tim Geithner, in a press release today, said the Chinese weren't manipulating it. Operative quote: "In the current Report, Treasury did not find that any major trading partner had manipulated its exchange rate..."

Geithner went on to credit China with taking steps "to enhance exchange rate flexibility." That's something he neglected to do during his confirmation hearing in January when he accused China of currency manipulation. Geithner's main points today: The Chinese currency appreciated by 16.6 percent in real terms between the end of June 2008 and the end of February 2009. And China's massive stimulus package -- which the U.S. hopes (a bit desperately perhaps) will help right the global economy.

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Comments (5)

jen_in_china Author Profile Page:

China does not want to devalue its investments in US government bonds which were in the realm of 200-billion USD prior to the finical crisis.

They still want to have competitive prices for their exports.

However, they are now agreeing with world sentiment that the USD does not need to be THE world currency and have opened up swaps of the RMB for foreign currency regionally in Asia and more recently with Argentina to pay directly for goods in RMB rather than transferring to USD.

It will be interesting to watch what impact this new polity has...

The RMB will appreciate naturally over time, but when it is ready, not because of a demand of some foreign governments.

Meanwhile I'm not upset to be earning RMB.

milesrider Author Profile Page:

China doesn't need a devaluing of its currency the US does. Currently the US dollar is rallying well against other major currencies and I for one, do not believe this is indicative of the state of America's economy. People forget that the international currency market is not a beauty pageant, whereby the winner is the most highly valued currency. In fact highly valued currencies generally thwart economic growth, because cheaper currencies yield the same quantity and quality of goods at a cheaper price. It is in the interest of economic growth that the US dollar is allowed to devalue, after all one cannot buy their way out of debt without a source of income. The US desperately needs to increase its exports and decrease its imports, increased exports does wonders for a flailing economy, it provides jobs and stimulates growth.

MHR

infoshop Author Profile Page:

Since when our nation become a sissy nation? Can't dare to call a spade is a spade!!!

manishyt Author Profile Page:

Expect Trouble When China Has More Say At The IMF
www.dailyexception.com
China is set to get an increased say at the IMF. It seems willing to put in capital to shore up the international financial institution, and so will have earned its place at the top table. However, we question what China will do with this new power. If events in Asia this week are anything to go by, we should be worried. China is using a territorial dispute in the Himalayas to withhold approval for loans from the Asian Development Bank to India. Such a move is unprecedented, particularly as the ADB has never in its history deferred a loan to India in such a manner. Clearly, China is using its influence at multilateral institutions as a means of furthering its strategic and military goals. We wonder what future bullying may be in store for the other countries of Asia (or the world) that don’t comply with China’s political views on topics it deems off limits such as Taiwan, Tibet or Tiananmen Square. China’s ascension in the ranks of world financial institutions may be inevitable. But the United States, and the West in general, need to make it abundantly clear from the outset that such type of behavior is not acceptable.
http://dailyexception.com/2009/04/11/expect-trouble-when-china-has-more-say-at-the-imf/

yeolds Author Profile Page:

Beggers {USA foreign debt] Cannot be choosers. End of story.

That anyone, presumedly a sane person, would have expected any other summary on the Yuan/USD exchange rate was drinking way too much KOOLAID, as the USA's Federal deficit is approaching 2 trillion dollars at a time that the USA needs the $ as reserve currency to be able to buy oil.

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