US President Barack Obama’s new administration said on Monday it would determine in the coming months whether China is manipulating its currency, setting the stage for a new burst of trade friction.
White House spokesman Robert Gibbs said the administration had not decided its policy on the perennial controversy of the yuan’s value, despite a stir caused by Treasury Secretary Timothy Geithner last week.
According to Gibbs, Geithner “was restating what the president had said during the [election] campaign,” when he observed in congressional testimony that Obama believes China is manipulating its currency.
“I think it’s safe to say this administration will determine in the spring what that means,” Gibbs said.
The US Treasury Department issues twice-yearly reports on global currency policies.
The next report is due in April, and a finding that China is “manipulating” its currency to gain a trade edge could trigger US sanctions.
Under the administration of former US president George W. Bush, the Treasury stopped short of that designation despite furious complaints in Congress that China does indeed artificially weaken the yuan’s value to boost its exports.
Depreciation talk flared up on Dec. 1 when the yuan posted its biggest one-day fall against the dollar since Chinese authorities instituted a narrow trading band for the currency in July 2005.
China on Friday denied that it was manipulating the yuan, responding to Geithner’s statements made to US senators as part of his nomination process.
“The Chinese government has never used so-called currency manipulation to gain benefits in its international trade,” China’s Commerce Ministry said in a statement faxed to reporters in Beijing.
“Directing unsubstantiated criticism at China on the exchange rate issue will only help US protectionism and will not help toward a real solution to the issue,” the statement said.
On Saturday, People’s Bank of China Vice Governor Su Ning (蘇寧) called Geithner’s allegation “untrue and misleading,” as analysts warned of a potential trade war between the US and the fast-rising Asian power.
Blaming the Chinese currency for the sky-high US trade deficit with China, lawmakers in the last Congress had crafted legislation aimed at imposing steep tariffs on Chinese imports if Beijing refused to make its currency more flexible.
Obama became a co-sponsor of one such bill, called the “Fair Currency Act,” at the height of his battle against former senator Hillary Clinton for the Democratic presidential nomination in April last year.
Now that Obama is president, China is a key test of whether the Democrat intends to execute some of his more protectionist campaign rhetoric as the US fights a debilitating recession.
Gibbs said the Obama administration intended to formulate a “vibrant policy” on US economic relations with China.
“We have to take a comprehensive approach to enhancing our economic relationship with China, including the currency issue,” he said.
In written answers to senators’ questions released last Thursday, Geithner said: “President Obama — backed by the conclusions of a broad range of economists — believes that China is manipulating its currency.”
Obama intends to “use aggressively all the diplomatic avenues open to him to seek change in China’s currency practices,” he said, while vowing a “deep engagement” with Beijing.
‘IN A DIFFERENT PLACE’: The envoy first visited Shanghai, where he attended a Chinese basketball playoff match, and is to meet top officials in Beijing tomorrow US Secretary of State Antony Blinken yesterday arrived in China on his second visit in a year as the US ramps up pressure on its rival over its support for Russia while also seeking to manage tensions with Beijing. The US diplomat tomorrow is to meet China’s top brass in Beijing, where he is also expected to plead for restraint as Taiwan inaugurates president-elect William Lai (賴清德), and to raise US concerns on Chinese trade practices. However, Blinken is also seeking to stabilize ties, with tensions between the world’s two largest economies easing since his previous visit in June last year. At the
Nearly half of China’s major cities are suffering “moderate to severe” levels of subsidence, putting millions of people at risk of flooding, especially as sea levels rise, according to a study of nationwide satellite data released yesterday. The authors of the paper, published by the journal Science, found that 45 percent of China’s urban land was sinking faster than 3mm per year, with 16 percent at more than 10mm per year, driven not only by declining water tables, but also the sheer weight of the built environment. With China’s urban population already in excess of 900 million people, “even a small portion
UNSETTLING IMAGES: The scene took place in front of TV crews covering the Trump trial, with a CNN anchor calling it an ‘emotional and unbelievably disturbing moment’ A man who doused himself in an accelerant and set himself on fire outside the courthouse where former US president Donald Trump is on trial has died, police said yesterday. The New York City Police Department (NYPD) said the man was declared dead by staff at an area hospital. The man was in Collect Pond Park at about 1:30pm on Friday when he took out pamphlets espousing conspiracy theories, tossed them around, then doused himself in an accelerant and set himself on fire, officials and witnesses said. A large number of police officers were nearby when it happened. Some officers and bystanders rushed
Beijing is continuing to commit genocide and crimes against humanity against Uyghurs and other Muslim minorities in its western Xinjiang province, U.S. Secretary of State Antony Blinken said in a report published on Monday, ahead of his planned visit to China this week. The State Department’s annual human rights report, which documents abuses recorded all over the world during the previous calendar year, repeated language from previous years on the treatment of Muslims in Xinjiang, but the publication raises the issue ahead of delicate talks, including on the war in Ukraine and global trade, between the top U.S. diplomat and Chinese