China adamantly opposes US yuan bill
China`s Foreign Ministry on Wednesday morning urged the US government, Congress and communities to firmly oppose the action of pressuring Chinese RMB exchange rate with its domestic legislation. "China called on the US government, Congress and various communities to firmly oppose the wrong doing of pressuring RMB exchange rate by way of the domestic legislation, to resist protectionism, and to resist the politicization of economic and trade issues, so as to safeguard the healthy development of China-US economic and trade relations," Foreign Ministry spokesman Ma Zhaoxu said in a written statement. Ma`s remarks came in response to the US Senate`s passing of the Currency Exchange Rate Oversight Reform Act on Tuesday. The bill is especially directed at China`s currency, the yuan, which the US claimed is undervalued to make Chinese exports to the US cheaper. China`s Ministry of Commerce on Wednesday also expressed its adamant opposition to a vote by the US Senate bill. The move has seriously violated international regulations and sent a wrong signal of escalating trade protectionism, the ministry said. The US Senate on Tuesday passed a controversial currency bill which threatens to punish China for so-called "currency manipulation" with retaliatory tariffs, despite strong opposition from China and many US business groups.
The Currency Exchange Rate Oversight Reform Act, sponsored by Senators Charles Schumer, Sherrod Brown and other Democratic and Republican Senators, was passed in a vote of 63-35 at the Senate. The bill is especially directed at China`s currency, the yuan, which the US claimed is undervalued to make Chinese exports to the US cheaper. With alleged goals of reducing trade imbalance between the two countries and creating more jobs at home, the US Senate bill aims to make it easier for the US government to designate China as a "currency manipulator" and slap retaliatory tariffs on goods imported from China. But the prospects of the bill becoming law remains in doubt, as it still has to clear the House of Representatives and then be signed by US President Barack Obama before becoming law. Both Obama and House Speaker John Boehner have expressed their reservations about the legislation. Obama told a White House news conference last Thursday that his main concern about the Senate bill is that it may not be consistent with international treaties and obligations, and will not be upheld by the World Trade Organization. Boehner also made it clear last week that it is "pretty dangerous to be moving legislation through the United States Congress forcing someone to deal with the value of their currency. " The US Senate`s move came at a time when the US unemployment is hovering above 9 percent and both the Democratic and Republican parties are gearing up for next year`s presidential election, which is expected to be dominated by the unemployment and other economic issues. US companies doing business in China are also opposed to the Senate`s passing of the bill. China`s Vice Foreign Minister Cui Tiankai on Monday warned that the bill could trigger a trade war and hold back global economic recovery. "(The currency bill) in no way represents the reality of the economic and trade relationship between China and the United States, and it might have an adverse impact on the development of the relations between the two countries," he said. "Should the proposed legislation become law, the only result would be a trade war between China and the US and that would be a lose-lose situation for both sides," Cui added.
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