Obama administration renews calls that China currency is undervalued
US President Barack Obama’s ambassador to China renewed calls Thursday for Beijing to let its currency appreciate further after Republican challenger Mitt Romney pressed for a harder line.
Ambassador Gary Locke said that he would “not engage in political debates” but said that the US position “is very clear and has been very consistent” in urging China to reform its exchange rate system.
“We know that the currency is still undervalued,” Locke said at the Carnegie Endowment for International Peace during a visit to Washington.
“The Chinese have made substantial progress and when you factor in the rate of inflation, it has appreciated significantly. But, again, still more needs to be done,” said Locke, a former governor from Obama’s Democratic Party.
The yuan, also known as the renminbi, has appreciated more than five percent against the dollar in the past two years as China contends with inflationary pressure. The yuan has risen some 30 percent since 2005 when China loosened its grip on it.
Critics in the United States and other developed economies accuse China of keeping its currency deliberately low to flood the world with exports of inexpensive goods, devastating the manufacturing industry elsewhere.
Romney, the Republican nominee in the November 6 presidential election, has repeatedly criticized Obama who, as a candidate in 2007, vowed to take China “to the mat” over its currency.
“For nearly four years, the president has repeatedly refused to crack down on China’s cheating, and American workers are the ones who have paid the price,” Romney campaign spokeswoman Andrea Saul said in the latest statement.
“As president, Mitt Romney will stand up for the middle class by creating jobs here at home and protecting American jobs abroad,” she said.
Romney earlier vowed that if elected, he would immediately declare China a currency manipulator — a designation that could trigger sanctions and, some analysts believe, a trade war between the world’s two largest economies.
Treasury Secretary Timothy Geithner has stopped short of the designation, preferring diplomacy to nudge China on the issue.