China Says U.S. Yuan Legislation Will Hurt World Economy
By Bloomberg News - Sep 30, 2010 2:35 AM PT
China Currency
Chinese 100 yuan bank notes are arranged for a photo in Beijing, China. Photographer: Nelson Ching/Bloomberg
StanChart's Minikin Interview on Yuan
Play Video
Sept. 30 (Bloomberg) -- Robert Minikin, senior foreign-exchange strategist at Standard Chartered Plc in Hong Kong, talks about U.S. calls for China to allow the yuan to appreciate, and his forecast for the currency. The U.S. House of Representatives passed legislation prodding China to raise the value of the yuan, as Democratic lawmakers pressed election-season proposals they said would increase factory employment. Minikin speaks with Rishaad Salamat on Bloomberg Television's "On the Move Asia." (Source: Bloomberg)
Gain Capital's Dolan Interview
Play Video
Sept. 30 (Bloomberg) -- Brian Dolan, chief strategist at FOREX.com, a unit of online currency trading firm Gain Capital in Bedminster, New Jersey, talks about U.S. calls for China to allow its currency to appreciate. The U.S. House of Representatives passed legislation prodding China to raise the value of the yuan, as Democratic lawmakers pressed election-season proposals they said would increase factory employment. Dolan also discusses the outlook for the euro, dollar and yen. He speaks with Susan Li on Bloomberg Television's "First Up." (Source: Bloomberg)
Themis's Saluzzi Interview About China Currency Bill
Play Video
Sept. 29 (Bloomberg) -- Joseph Saluzzi, co-head of equity trading at Themis Trading LLC, talks about U.S. legislation aimed at prodding China to raise the value of its currency. The bill was passed in the U.S. House today with bipartisan support. Saluzzi also discusses the outlook for U.S. stocks. He talks with Carol Massar, Matt Miller, Adam Johnson and Dominic Chu on Bloomberg Television's "Street Smart." Steve Quirk of TD Ameritrade also speaks. (Source: Bloomberg)
UBS's Palma Interview About U.S. Legislation on Yuan
Play Video
Sept. 29 (Bloomberg) -- Jeff Palma, global equity strategist at UBS AG, talks about U.S. legislation designed to prod China to raise the value of its currency. Palma, speaking with Matt Miller and Carol Massar on Bloomberg Television's "Street Smart," also discusses his investment strategy and the U.S. stock market. (Source: Bloomberg)
Clay Lowery Interview on China
Play Video
Sept. 29 (Bloomberg) -- Clay Lowery, a former assistant Treasury secretary who is now a managing director of the Glover Park Group in Washington, talks about China's yuan policy. China currency legislation will pass the U.S. House today with bipartisan support, the measure’s sponsors said after a committee approved the bill for consideration. Lowery speaks with Margaret Brennan on Bloomberg Television's "InBusiness". (Source: Bloomberg)
Lardy Interview on China Currency Legislation
Play Video
Sept. 29 (Bloomberg) -- Nicholas Lardy, a senior fellow at the Peterson Institute for International Economics, discusses China currency legislation being considered by Congress. The House of Representatives may vote on the legislation, which would let U.S. companies bring trade complaints against importers of products that benefit from a weak Chinese currency, as soon as today. Lardy speaks from Washington with Betty Liu on Bloomberg Television's "In the Loop." (Source: Bloomberg)
Tobias Levkovich Interview
Play Video
Sept. 29 (Bloomberg) -- Tobias Levkovich, chief U.S. equity strategist at Citigroup Inc., discusses his investment strategy in U.S. stocks and the implications of legislation seeking to push China into raising the value of its currency. Levkovich talks with Margaret Brennan on Bloomberg Television’s “InBusiness.” (Source: Bloomberg)
Murphy Interview on China Currency Bill
Play Video
Sept. 29 (Bloomberg) -- U.S. Representative Tim Murphy, a Pennsylvania Republican, discusses the outlook for China currency legislation being considered by Congress. Murphy, a co-sponsor of the bill, says the legislation will pass with a "strong bipartisan majority." He talks with Peter Cook on Bloomberg Television's "InBusiness." (Source: Bloomberg)
Attachment: CBO Report on Currency Bill
China said a measure passed by the U.S. House of Representatives yesterday aimed at pushing up the value of the yuan will hurt the global economy if it becomes law.
The House of Representatives voted yesterday for a measure that would let domestic companies petition for duties on imports from China to compensate for the effect of a weak yuan. China said the legislation would do nothing to cut the U.S. trade deficit and only risk harming growth. The Senate won’t take up its version until after the November election, said Senator Charles Schumer, a New York Democrat.
“We firmly oppose the U.S. Congress approving such bills,” Foreign Ministry spokeswoman Jiang Yu told reporters today in Beijing. “We urge the U.S. congressmen to be clearly aware of the importance of China-U.S. trade and economic relations, resist protectionism so as to refrain from any damage to the interests of both peoples and people around the world.”
The 348-79 House vote highlights growing trade tensions between the world’s two biggest economies. The U.S. is enduring persistently high unemployment and a surge this year in the trade deficit with China, which rose 27 percent to $25.9 billion in July from a year ago.
House Ways and Means Committee Chairman Sander Levin yesterday said the bill “says very concretely is that we mean business” and will “send a message” to global leaders to make progress on currency values at a summit next month.
‘Serious Concerns’
President Barack Obama’s administration, which hasn’t taken a position on the bill, acknowledged the sentiment. The vote “clearly shows lawmakers have serious concerns about this issue,” Treasury Department spokeswoman Natalie Wyeth said in an e-mail. Democrats were joined by 99 of the 178 Republicans on the vote.
China’s central bank pledged in a statement yesterday it will expand flexibility of the yuan, which has gained 2 percent since a two-year dollar peg was scrapped on June 19.
U.S. Treasury Secretary Timothy F. Geithner has called the appreciation inadequate, and economists such as C. Fred Bergsten at the Peterson Institute for International Economics in Washington say the yuan is undervalued by as much as 25 percent.
The yuan weakened today for the first time in 13 days, dropping 0.1 percent to 6.6933 per dollar as of 10:00 a.m. in Shanghai. The central bank set the reference rate for daily trade weaker for the first time in three days.
‘Government’s Attitude’
“The fixing shows the Chinese government’s attitude towards the vote,” said Liu Li-gang, a Hong Kong-based economist at Australia & New Zealand Banking Group Ltd. “China wants to show it won’t yield to any foreign pressure. It will determine the policy based on its own economic fundamentals.”
The yuan had gained 1.5 percent in the 11 trading days before the vote. That rate of appreciation hasn’t satisfied China’s critics in the U.S.
Obama said yesterday at an event in Des Moines, Iowa, that he is “pushing China about their currency” because the Chinese are managing the yuan “in ways that make our goods more expensive to sell.”
Chinese Commerce Ministry spokesman Yao Jian said China doesn’t undervalue the yuan to gain a trade advantage and the bill won’t eliminate the U.S. gap. He said the legislation violates World Trade Organization rules and said the U.S. deficit was a result of changes in the global supply structure.
China’s Rebuttal
“China has a trade surplus with the U.S., but huge deficits with a number of Asian countries and regions,” Yao said. One-sided trade restrictions won’t solve the imbalance and the U.S. should instead lift restrictions on exports and work more actively with China, he said.
China this year has run up a $145 billion trade surplus with the U.S., more than the U.S. deficit with the next seven- largest trading partners combined. That gap, combined with the drop in American manufacturing employment, the lack of appreciation in the yuan and this year’s congressional elections have focused lawmakers’ attention on the commercial relationship.
The U.S. Chamber of Commerce, retailers, apparel importers and financial firms opposed the currency bill, and wrote lawmakers before the vote saying passage may lead to retaliation against businesses with investments in China or exporters of farm and manufactured goods.
‘Real Concerns’
“There are real concerns about how effective this will be and whether it will induce China to change its currency regime,” Representative Kevin Brady, a Texas Republican, said during debate on the bill. “This is no substitute for a comprehensive China policy, and that’s been sorely lacking from this administration.”
Backers of the measure say some companies will benefit, and the goal is to prod China to raise the value of the yuan and getObama to put more pressure on the Chinese to act.
Obama pressed China’s Premier Wen Jiabao in a two-hour meeting at the United Nations Sept. 23 to increase the yuan’s value. Wen said a day earlier that a 20 percent increase in the currency would cause severe job losses and trigger social instability in China.
The legislation is H.R. 2378.
--Mark Drajem, Michael Forsythe, Li Yanping. With assistance from in Judy Chen in Shanghai and Kim Chipman, Nicholas Johnston and Hans Nichols in Washington. Editors: Steve Geimann, John Brinsley.
To contact the reporter on this story: Mark Drajem in Washington at mdrajem@bloomberg.net
To contact the editor responsible for this story: Larry Liebert at lliebert@bloomberg.net
By Bloomberg News - Sep 30, 2010 2:35 AM PT
China Currency
Chinese 100 yuan bank notes are arranged for a photo in Beijing, China. Photographer: Nelson Ching/Bloomberg
StanChart's Minikin Interview on Yuan
Play Video
Sept. 30 (Bloomberg) -- Robert Minikin, senior foreign-exchange strategist at Standard Chartered Plc in Hong Kong, talks about U.S. calls for China to allow the yuan to appreciate, and his forecast for the currency. The U.S. House of Representatives passed legislation prodding China to raise the value of the yuan, as Democratic lawmakers pressed election-season proposals they said would increase factory employment. Minikin speaks with Rishaad Salamat on Bloomberg Television's "On the Move Asia." (Source: Bloomberg)
Gain Capital's Dolan Interview
Play Video
Sept. 30 (Bloomberg) -- Brian Dolan, chief strategist at FOREX.com, a unit of online currency trading firm Gain Capital in Bedminster, New Jersey, talks about U.S. calls for China to allow its currency to appreciate. The U.S. House of Representatives passed legislation prodding China to raise the value of the yuan, as Democratic lawmakers pressed election-season proposals they said would increase factory employment. Dolan also discusses the outlook for the euro, dollar and yen. He speaks with Susan Li on Bloomberg Television's "First Up." (Source: Bloomberg)
Themis's Saluzzi Interview About China Currency Bill
Play Video
Sept. 29 (Bloomberg) -- Joseph Saluzzi, co-head of equity trading at Themis Trading LLC, talks about U.S. legislation aimed at prodding China to raise the value of its currency. The bill was passed in the U.S. House today with bipartisan support. Saluzzi also discusses the outlook for U.S. stocks. He talks with Carol Massar, Matt Miller, Adam Johnson and Dominic Chu on Bloomberg Television's "Street Smart." Steve Quirk of TD Ameritrade also speaks. (Source: Bloomberg)
UBS's Palma Interview About U.S. Legislation on Yuan
Play Video
Sept. 29 (Bloomberg) -- Jeff Palma, global equity strategist at UBS AG, talks about U.S. legislation designed to prod China to raise the value of its currency. Palma, speaking with Matt Miller and Carol Massar on Bloomberg Television's "Street Smart," also discusses his investment strategy and the U.S. stock market. (Source: Bloomberg)
Clay Lowery Interview on China
Play Video
Sept. 29 (Bloomberg) -- Clay Lowery, a former assistant Treasury secretary who is now a managing director of the Glover Park Group in Washington, talks about China's yuan policy. China currency legislation will pass the U.S. House today with bipartisan support, the measure’s sponsors said after a committee approved the bill for consideration. Lowery speaks with Margaret Brennan on Bloomberg Television's "InBusiness". (Source: Bloomberg)
Lardy Interview on China Currency Legislation
Play Video
Sept. 29 (Bloomberg) -- Nicholas Lardy, a senior fellow at the Peterson Institute for International Economics, discusses China currency legislation being considered by Congress. The House of Representatives may vote on the legislation, which would let U.S. companies bring trade complaints against importers of products that benefit from a weak Chinese currency, as soon as today. Lardy speaks from Washington with Betty Liu on Bloomberg Television's "In the Loop." (Source: Bloomberg)
Tobias Levkovich Interview
Play Video
Sept. 29 (Bloomberg) -- Tobias Levkovich, chief U.S. equity strategist at Citigroup Inc., discusses his investment strategy in U.S. stocks and the implications of legislation seeking to push China into raising the value of its currency. Levkovich talks with Margaret Brennan on Bloomberg Television’s “InBusiness.” (Source: Bloomberg)
Murphy Interview on China Currency Bill
Play Video
Sept. 29 (Bloomberg) -- U.S. Representative Tim Murphy, a Pennsylvania Republican, discusses the outlook for China currency legislation being considered by Congress. Murphy, a co-sponsor of the bill, says the legislation will pass with a "strong bipartisan majority." He talks with Peter Cook on Bloomberg Television's "InBusiness." (Source: Bloomberg)
Attachment: CBO Report on Currency Bill
China said a measure passed by the U.S. House of Representatives yesterday aimed at pushing up the value of the yuan will hurt the global economy if it becomes law.
The House of Representatives voted yesterday for a measure that would let domestic companies petition for duties on imports from China to compensate for the effect of a weak yuan. China said the legislation would do nothing to cut the U.S. trade deficit and only risk harming growth. The Senate won’t take up its version until after the November election, said Senator Charles Schumer, a New York Democrat.
“We firmly oppose the U.S. Congress approving such bills,” Foreign Ministry spokeswoman Jiang Yu told reporters today in Beijing. “We urge the U.S. congressmen to be clearly aware of the importance of China-U.S. trade and economic relations, resist protectionism so as to refrain from any damage to the interests of both peoples and people around the world.”
The 348-79 House vote highlights growing trade tensions between the world’s two biggest economies. The U.S. is enduring persistently high unemployment and a surge this year in the trade deficit with China, which rose 27 percent to $25.9 billion in July from a year ago.
House Ways and Means Committee Chairman Sander Levin yesterday said the bill “says very concretely is that we mean business” and will “send a message” to global leaders to make progress on currency values at a summit next month.
‘Serious Concerns’
President Barack Obama’s administration, which hasn’t taken a position on the bill, acknowledged the sentiment. The vote “clearly shows lawmakers have serious concerns about this issue,” Treasury Department spokeswoman Natalie Wyeth said in an e-mail. Democrats were joined by 99 of the 178 Republicans on the vote.
China’s central bank pledged in a statement yesterday it will expand flexibility of the yuan, which has gained 2 percent since a two-year dollar peg was scrapped on June 19.
U.S. Treasury Secretary Timothy F. Geithner has called the appreciation inadequate, and economists such as C. Fred Bergsten at the Peterson Institute for International Economics in Washington say the yuan is undervalued by as much as 25 percent.
The yuan weakened today for the first time in 13 days, dropping 0.1 percent to 6.6933 per dollar as of 10:00 a.m. in Shanghai. The central bank set the reference rate for daily trade weaker for the first time in three days.
‘Government’s Attitude’
“The fixing shows the Chinese government’s attitude towards the vote,” said Liu Li-gang, a Hong Kong-based economist at Australia & New Zealand Banking Group Ltd. “China wants to show it won’t yield to any foreign pressure. It will determine the policy based on its own economic fundamentals.”
The yuan had gained 1.5 percent in the 11 trading days before the vote. That rate of appreciation hasn’t satisfied China’s critics in the U.S.
Obama said yesterday at an event in Des Moines, Iowa, that he is “pushing China about their currency” because the Chinese are managing the yuan “in ways that make our goods more expensive to sell.”
Chinese Commerce Ministry spokesman Yao Jian said China doesn’t undervalue the yuan to gain a trade advantage and the bill won’t eliminate the U.S. gap. He said the legislation violates World Trade Organization rules and said the U.S. deficit was a result of changes in the global supply structure.
China’s Rebuttal
“China has a trade surplus with the U.S., but huge deficits with a number of Asian countries and regions,” Yao said. One-sided trade restrictions won’t solve the imbalance and the U.S. should instead lift restrictions on exports and work more actively with China, he said.
China this year has run up a $145 billion trade surplus with the U.S., more than the U.S. deficit with the next seven- largest trading partners combined. That gap, combined with the drop in American manufacturing employment, the lack of appreciation in the yuan and this year’s congressional elections have focused lawmakers’ attention on the commercial relationship.
The U.S. Chamber of Commerce, retailers, apparel importers and financial firms opposed the currency bill, and wrote lawmakers before the vote saying passage may lead to retaliation against businesses with investments in China or exporters of farm and manufactured goods.
‘Real Concerns’
“There are real concerns about how effective this will be and whether it will induce China to change its currency regime,” Representative Kevin Brady, a Texas Republican, said during debate on the bill. “This is no substitute for a comprehensive China policy, and that’s been sorely lacking from this administration.”
Backers of the measure say some companies will benefit, and the goal is to prod China to raise the value of the yuan and getObama to put more pressure on the Chinese to act.
Obama pressed China’s Premier Wen Jiabao in a two-hour meeting at the United Nations Sept. 23 to increase the yuan’s value. Wen said a day earlier that a 20 percent increase in the currency would cause severe job losses and trigger social instability in China.
The legislation is H.R. 2378.
--Mark Drajem, Michael Forsythe, Li Yanping. With assistance from in Judy Chen in Shanghai and Kim Chipman, Nicholas Johnston and Hans Nichols in Washington. Editors: Steve Geimann, John Brinsley.
To contact the reporter on this story: Mark Drajem in Washington at mdrajem@bloomberg.net
To contact the editor responsible for this story: Larry Liebert at lliebert@bloomberg.net