I Get By With Alittle Help From My Friends....

Dinar Outcast

You are not connected. Please login or register

Chinese Trade Barriers May Undercut Yuan Change, Locke Says

Go down  Message [Page 1 of 1]


Chinese Trade Barriers May Undercut Yuan Change, Locke Says

April 9 (Bloomberg) -- U.S. Commerce Secretary Gary Locke said China should allow the yuan to float, even though import barriers may undercut any boost for American exporters from a revaluation.

“Sometimes it’s like two steps forward and one step backwards, or two steps sideways” when dealing with China, Locke said in a Bloomberg Television interview. “They can revalue their currency, but if they still have market barriers or if they favor their domestic companies, then that revaluation of the currency will not make much of a difference.”

U.S. Treasury Secretary Timothy F. Geithner’s unscheduled meeting with Chinese Vice Premier Wang Qishan in Beijing yesterday fanned speculation the yuan’s 21-month-old peg to the dollar may be scrapped. Geithner last week postponed an April 15 deadline for a U.S. review of currency policies amid pressure from Congress to brand China a currency manipulator.

Twelve-month non-deliverable yuan forwards were little changed at 6.6136 per dollar as of 3:13 p.m. in Hong Kong ahead of trade data tomorrow that may show the nation’s first monthly trade deficit in six years, according to a Bloomberg News survey of economists. The contracts strengthened yesterday by the most in six weeks after the New York Times reported that China may unveil a revised yuan policy within days, including a small, one-time jump in the currency.

‘Imminent’ Move

“A move is imminent,” said, Ben Simpfendorfer, Hong Kong-based chief China economist at Royal Bank of Scotland Group Plc, said in an interview. “It’s more likely to be weeks rather than days.”

Geithner and Wang “exchanged views on U.S.-China economic relations, the global economic situation and issues relating to” a May meeting of officials from the two nations in Beijing, according to a Treasury Department statement.

China’s trade surplus with the U.S. last year rose to $226.8 billion, more than the combined deficit the U.S. had with its next nine biggest trading partners, according to Commerce Department data.

The Chinese currency “should be market based; it should be allowed to float,” Locke said from New York. “The Chinese foreign-exchange rate puts American companies at a disadvantage.”

Blaming The Peg

Senators including New York Democrat Charles Schumer and South Carolina Republican Lindsey Graham blame the currency peg for much of the imbalance. The peg keeps the currency undervalued, aiding Chinese exporters and discriminating against foreign competitors, according to economists such as C. Fred Bergsten, director of the Peterson Institute for International Economics in Washington.

U.S. companies are also harmed by Chinese policies to restrict government purchases to software and clean-energy products developed in the country, rules curbing the growth of FedEx Corp. distribution, and by piracy of copyrighted movies and music, Locke said.

Tim Adams, a former U.S. Treasury Undersecretary, said China may allow gains by the yuan “fairly soon” to limit the focus on the currency at international summits in coming months.

The Group of 20 finance ministers’ meeting on April 23 in Washington, the U.S.-China Strategic and Economic Dialogue in Beijing in May, and the G-20 summit in Toronto in June are “key events,” Adams said in an interview from Washington. “I don’t think the Chinese want to go into these key forums talking about the exchange rate.”

Stay Competitive

China’s companies should be able to remain competitive if the yuan rises, Dell Inc.’s China President Amit Midha said today.

“As long as it’s gradual, I think most industries would be able to adjust,” Midha, who is also vice-chair of the China Association of Enterprises with Foreign Investment, said in an interview. “It would be more difficult to adjust if the revaluation was sudden.”

People’s Bank of China adviser Xia Bin said yesterday a small one-time revaluation of the yuan may be better than a return to gradual appreciation because it would help deter speculators. Hong Kong Exchanges & Clearing Ltd. Chairman Ronald Arculli said yesterday that China would avoid a “big- bang” revaluation.

“Where the economic recovery of the global marketplace is still patchy, and not as solid as we would like to see, currency issues are very sensitive,” Arculli, 71, said. “The internationalization of the renminbi is a stated objective of the central government, but the timing of it, how we get there, and all that is what we call ‘work in progress’.”

Level Playing Field

U.S. companies meanwhile remain concerned at the lack of a “level playing field” for goods in China, Locke said.

China introduced rules last year that restrict government purchases to technology products developed in China, the leading complaint of U.S. trade groups representing companies such as Microsoft Corp. and Intel Corp.

Government contracting preferences are among policies, including tax rebates, export restraints and “Buy China” regulations, that limit trade and foreign investment, the U.S. Trade Representative’s office said in a December report to Congress.

Still, Locke said commercial relations between the two countries have benefited since China began to open up its markets and joined the World Trade Organization in 2001.

“We are so economically interdependent with one another,” he said. “The last thing we want to do is engage in a trade war.”


Imminent yes, Imminent no, Imminent yes, Imminent no...AGGGGGG who to believe??????????


china is just trying to drive ya crazy ck...oh wait...that trip has already been made....lmaooooooooooooooooooo Very Happy


crazy??? I own that state! come on down and have a drink drunken

Sponsored content

Back to top  Message [Page 1 of 1]

Permissions in this forum:
You cannot reply to topics in this forum