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.
“China seeks advantage through systematic exploitation of other economies,” Romney wrote.
Under the Senate bill, a process that could result in sanctions being set in motion if the Treasury determined that China’s currency was “misaligned” and the country did not act to resolve the issue. Currently, Treasury must determine that a country is willfully manipulating its currency, a higher bar to reach, before sanctions can be imposed.
Softbank Group Corp plans to keep a stake in the chip designer Arm Ltd, even if it sells a partial interest to Nvidia Corp, the Nikkei reported. The companies are negotiating terms, the newspaper reported, citing sources. Softbank might take a stake in Nvidia after it buys Arm, the report said. Nvidia and Arm might also merge through a share swap, and Softbank would become a major shareholder in the combined company, it said. The two parties aim to reach a deal in the next few weeks, the sources said, asking not to be identified because the information is private. Nvidia is the
Gold surged to a fresh record on Friday, fueled by US dollar weakness and low interest rates, while silver headed for its best month since 1979. Spot bullion is up more than 10 percent this month, as US real yields lingered near record lows. While the ferocity of rallies in gold and silver cooled in the middle of the week, most market watchers predict there might be more gains ahead. Both metals have added about 30 percent this year, with gold and silver exchange-traded funds boosting holdings to a record, as concern about the fallout from the COVID-19 pandemic fuels demand for
MOVING FROM CHINA? The article did not name the company, but Foxconn, Wistron and Pegatron were among firms chosen for a production-linked incentive plan in India An Apple Inc vendor is looking at shifting six production lines to India from China, which could result in US$5 billion of iPhone exports from the South Asian nation, the Times of India reported, citing people familiar with the matter who it did not identify. The establishment of the facility would create about 55,000 jobs over about a year, the newspaper reported, not naming the Apple vendor. It would also cater to the domestic market and expand operations to include tablets and laptops, the newspaper reported. Samsung Electronics Co and Apple’s assembly partners are among 22 companies that have pledged 110 billion
MediaTek Inc (聯發科) has hired a former US Department of Commerce official to help it navigate worsening US-China tensions that have already ensnared its customer Huawei Technologies Co (華為). Patrick Wilson, who most recently served as director of the department’s Office of Business Liaison, has been appointed vice president of government affairs at MediaTek USA to lead its public policy initiatives, the chip designer said in a draft press statement seen by Bloomberg News. Wilson previously worked at the Semiconductor Industry Association, where he led the trade group’s dealings with the US federal government. Technology companies with ties to or operations in China