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U.S. Congress committee approved the China trade sanction bills

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U.S. Congress committee approved the China trade sanction bills
Sep 26th, 2010

US Congress 300x196 U.S. Congress committee approved the China trade sanction billsThe U.S. now adopts a much tougher stance towards the issue of the Chinese yuan. One day after the meeting between U.S. President Barack Obama and Chinese premier Wen Jiabao, the U.S. Congress committee approved the sanctions bill on China.

The bill would place retaliatory trade sanctions on China. It would allow the states to impose import duties on countries which currencies are undervalued.

There will be a vote on the bill of the House of Representatives, the lower chamber of the Congress, next week.

The bill would need support in the Senate in order to become law.

Treasury Secretary Tim Geithner said the Chinese yuan was ”significantly undervalued” and said he was looking for some mix tools to encourage China to appreciate the currency.

President Barack Obama pressed for an appreciation of the yuan in a two-hour meeting with Chinese premier Wen Jiabao this week.

Sander Levin, chairman of the House Ways and Means committee, said it was all about American jobs: “China’s persistent manipulation is a major distortion in the international marketplace,”

“(The yuan) has a major impact on American workers and therefore American jobs. That’s what this is really all about.” he added.

The states accused the undervalued yuan would offer China an unfair export competitiveness.

China has been enjoying the trade surplus since the financial recession and the surplus has been increasing. Meanwhile, U.S. has suffered from trade deficits and high unemployment rate.

China has abandoned the fixed exchange rate in June. The exchange rate to the dollar has been appreciated by 1.9 per cent since then.

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