Treasury FAILS Once Again To Cite China Currency Manipulation

July 13, 2010

Poorly served by our Executive Branch!

After postponements and a head fake by the Chinese, the US Department of the Treasury has once again failed to name China as a currency manipulator.

You can read the Treasury Department  Report to Congress here.

Here’s what Treasury Tim Geithner had to say:

“What matters is how far and how fast the renminbi appreciates…We will closely and regularly monitor the appreciation of the renminbi and will continue to work towards expanded U.S. export opportunities in China that support employment in the United States, in close consultation with Congress.”

Hey Tim,  how many more years do you guys think you’ll need to closely and regularly monitor this?

 Chinese Yuans to 1 USD (invert,data) 
       

Chart courtesy xrates.com  

When do you guys think it will be time for action? This is the same old do nothing approach we suffered through from the last administration. (PMPA has been active on this issue since 2004 when we joined the China Currency Coalition)

When was that “Change”you guys campaigned about  supposed to arrive? 

On the China Currency Issue, NOTHING HAS CHANGED

We mentioned this before here, here and here.

So what can you do? Help us get Congress to do what the Administration can’t won’t.

National Currency Call-in  DayInstructions. Today!

Manufacturers from all across the United States will be contacting their legislators asking them to support Senate Bill 3134 and co-sponsor House Bill 2378. 

Congress needs to hear from manufacturers on this important issue, so they’ll move on legislation to provide the Administration with additional tools to prosecute illegal currency manipulators. Clearly, the Executive Branch can’t get it done. 

The time to act is now.

Photo credit: Poster, Yuan

Share


Chinese Currency, U.S. Continues To Be The Fool

April 9, 2010

Guest Post by Peter Morici, Professor and former Chief Economist, US Trade Commission.

The Washington Post reported on Friday morning that Treasury Secretary Timothy Geithner and Chinese Vice Premier Wang Qishan were close to a deal that would permit the Chinese yuan to appreciate by 3 percent this year.  

3%! Woo Hoo! We're REALLY Impressed!

This is wholly inadequate and would do little to resolve the U.S.-China trade imbalance, which was $227 billion in 2009 and 60 percent of the total U.S. trade deficit. The balance was largely oil. 

China’s yuan is likely overvalued by 40 percent, and Beijing accomplishes this by printing yuan and selling those for dollars to augment private transactions. In 2009, those purchases were $450 billion or about 10 percent of its GDP and 28 percent of its exports of goods and services. 

The U.S. trade deficit with China and on oil causes a shortage of demand for U.S. made goods and services and stifles investment in U.S. export industries, which are the most productive and R&D-intensive industries. 

In 2010, the trade deficit with China is reducing U.S. GDP by more than $400 billion or nearly three percent. Unemployment would be falling rapidly and the U.S. economy recovering more rapidly but for the trade deficit with China and Beijing’s currency policies. 

Longer term, China’s currency policies reduce U.S. growth by one percentage point a year. The U.S. economy would likely be $1 trillion larger today, but for the trade deficits with China over the last 10 years. 

A three percent revaluation of its currency will do little to change those numbers. In fact, because of Chinese modernization, the intrinsic value of China’s currency rises each year. Hence, a three percent revaluation over the next year would not even amount to the change in yuan undervaluation. 

As the U.S. trade balance with China grew worse, Beijing could say “see exchange rates don’t matter.” 

Beijing is playing the Obama Administration for fools. 

Peter Morici is a professor at the Smith School of Business, University of Maryland, and former Chief Economist at the U.S. International Trade Commission.

Sucker.

Share


Follow

Get every new post delivered to your Inbox.

Join 82 other followers