Sun, Oct 16, 2011 - Page 11 News List

US puts China currency report on hold

VALUE JUDGEMENT:Emotions remained high around the yuan debate, with Mitt Romney criticizing China and saying he would brand it a currency manipulator

AP, Washington

The administration of US President Barack Obama said on Friday it will delay a decision on whether China is manipulating its currency to gain trade advantages until after a series of upcoming international meetings. The extra time will allow top officials from both countries the opportunity to discuss the matter.

The currency report under law was scheduled to be released yesterday, although this administration and previous administrations have often missed the deadline.

The delay is coming at a time when the administration is under increased pressure to brand China as a currency manipulator.

The US Senate this week passed legislation that tightens guidelines used to determine when a country is unfairly manipulating its currency on a 63-35 vote that demonstrated broad bipartisan support for the measure.

Republican presidential candidate Mitt Romney assailed China’s trade and currency policies in a speech on Thursday and in an opinion piece on Friday in the Washington Post in which he said he would brand China a currency manipulator on his first day in office as president.

In a brief statement, the US -Department of Treasury said that it was delaying the currency report, which should be released on April 15 and Oct. 15 each year, until after a series of meetings including discussions this weekend in Paris among finance officials from the G20 major economies.

The Treasury said it would also wait until after a G20 leaders’ summit on Nov. 3 and Nov. 4 in Cannes, France, where Obama will have a chance to confer with Chinese officials and a Nov. 12 and Nov. 13 summit of leaders of the APEC forum in Hawaii, which Obama and Chinese officials are also scheduled to attend.

The Treasury’s statement said the delay would give the administration “a chance to assess progress” before issuing its determination. Administration officials have repeatedly urged China to move more quickly to allow its currency to rise in value against the US dollar. It has appreciated by about 10 percent since June last year when Beijing resumed allowing the currency to rise in relation to the dollar.

US manufacturers contend the currency is still undervalued by as much as 40 percent, making Chinese products cheaper in the US and US goods more expensive in China and playing a major role in widening the trade gap between the two nations.

The commerce department reported on Thursday that the US trade deficit with China hit a record high for a single month of US$29 billion in August and is running 9 percent above last year’s level, when the deficit between the two countries hit a record US$273 billion.

US Secretary of the Treasury Timothy Geithner, in Paris for the G20 meetings, said on Friday in an interview with CNBC that “we have a big problem with China as a country and an economy.” He said the problems include China’s failure to allow its currency to appreciate at a faster rate, but also other government policies that give unfair advantages to Chinese firms over US companies.

The US Senate currency bill faces an uncertain fate in the House where House Speaker John Boehner has voiced his opposition.

Geithner said the administration could not support the measure without changes to make it compatible with international trade rules.

Romney wrote in the Post opinion piece that Obama had taken a tougher line with China as a candidate than he has since becoming president.

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