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US Treasury cleared China of currency manipulation

By admin
Saturday, February 5, 2011 10:04 EDT
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WASHINGTON – The US Treasury cleared China of official accusations of currency manipulation Friday, but said progress toward allowing the yuan to appreciate was “insufficient.”

In a report to Congress, the Treasury said that China, eight other countries and the eurozone had not manipulated exchange rates “for purposes of… gaining unfair competitive advantage in international trade.”

“Based on the resumption of exchange rate flexibility last June and the acceleration of the pace of real bilateral appreciation over the past few months,” China’s behavior did not qualify under the official definition of manipulation, it said in the long-delayed report.

“Treasury’s view, however, is that progress thus far is insufficient and that more rapid progress is needed.”

It pledged to “continue to closely monitor the pace of appreciation” of the yuan.

In addition to China, the Treasury looked at the policies of the eurozone and eight other economies: Brazil, Britain, Canada, Japan, Mexico, South Korea, Switzerland and Taiwan. The 10 together account for about 75 percent of US trade.

“Treasury has concluded that no major trading partner of the United States met the standards” of manipulation as identified by the law “during the period covered in this report.”

The Chinese currency policy has been a major irritant in bilateral relations with the world’s second-largest economy, and was a key topic of discussion when President Barack Obama hosted Chinese President Hu Jintao on a state visit last month.

The United States accuses Beijing of keeping its currency undervalued, flooding the country with cheap exports and costing US jobs.

US lawmakers have pushed the Obama administration to get tough with China over the yuan.

A bill threatening sanctions to punish Beijing’s currency policy is lurking in Congress, which has awaited the Treasury report since it was first supposed to appear on October 15.

China has pledged to allow the yuan to gain value, but at a measured pace so as not to destabilize its rapidly expanding economy.

The Treasury said the yuan, also called the renminbi (RMB), had appreciated 3.7 percent against the dollar between mid-June and January 27.

In fact, it added, weighing the higher rate of inflation in China, “the RMB has been appreciating more rapidly against the dollar on a real, inflation-adjusted basis, at a rate which if sustained would amount to more than 10 percent per year.”

The report also said that many Chinese know a more flexible exchange regime will benefit the country, and that the nascent creation of an offshore market for the yuan, mainly in Hong Kong, represents the beginning of a shift.

But that was not enough to placate China’s critics in Congress.

Democrat Max Baucus, head of the Senate Finance Committee, slammed the findings.

“China’s currency practices harm ranchers, farmers, and exporters across America and around the world,” the senator from the western state of Montana said in a statement.

“China has been given a free pass on its currency practices for far too long. We need to hold China and our other trading partners accountable for their actions.”

Sherrod Brown, a Democratic senator from Ohio, also knocked the Treasury’s conclusion and called on Congress to pass legislation on currency manipulation.

The report “both confirms and ignores the obvious: the appreciation of the yuan is completely inadequate, and it’s not by accident,” Brown said.

“While the administration prefers to take a diplomatic approach towards the Chinese government’s unlawful practice of currency manipulation, American manufacturers and workers struggling to compete against unfairly subsidized imports can’t afford to wait any longer for action,” he said.

The report came a week ahead of the government’s December trade balance numbers. The Commerce Department is expected to report next Friday that the US trade deficit widened to $50.0 billion from $42.6 billion in November.

China has appeared on track to beat its 2008 record trade surplus with the US. Over the first 11 months of 2010, the China trade gap was $252.4 billion, compared with $268.0 billion for all of 2008.

 
 
 
 
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  • Anonymous

    Move along, nothing to see here…

  • Anonymous

    You can’t complain when you hire the fox to guard the hen house and the egg count is wrong and some hens go missing.

  • Taleisin

    Not doubt, this hot potato was discussed when Obama had a nice state dinner recently.
    I am sure the Chinese will find this result very agreeable.

  • Wyrdless

    How convenient that the report only covers a time period where the Chinese appreciated their currency.

    So there is no currency manipulation, but the yuan has to appreciate.
    If this report is truthful and their is no manipulation then, why would the report recommend to have the yuan rise in value?

  • CozmicSeer

    This is what happens when our leaders and representatives(most but not all) allow borrowing on a scale unimagined years ago from a foreign country. Since a good share of it is from China, it seems to have given them a lot of leverage over what our government does. Doesn’t this qualify as a foreign influence on our politics? If any of us had done this 40 years ago, the powers that be would have thrown us in a cold, dark cell for life.

  • http://twitter.com/Howieisright Howieisright

    We are china biggest supporters buying slave labor goods. Compared to small amount of inflated exports we send them.
    We will be helping them pass us up. You can see it after Bidens trip to China he came back then the Ass kissing started.

  • Anonymous

    Exactly. Go back to sleep, America. Obey. Consume. Don’t question things, we’re protecting you from terrorism.

  • godistwaddle

    Wal-Mart prolly complained, “Don’t mess with our producer.”

  • Anonymous

    It is all political posturing by the incompetent genius in the White House. The Chinese accomplish their so called currency manipulation by buying US treasury bonds.

  • Anonymous

    Wait till the Chinese start massively invading the US to set up
    manufacturing at major cities with their Free Trade Zones.
    257 are being negotiated by mayors and governors. Boise’s
    Beiter and Otto have promised 30,000 acres just south of the airport
    in Idaho. Special visas for invaders will enable them to take
    any job though, so they won’t be restricted to their zones.
    Oh, and the hell with the burden on the grid and water resources,
    and the impact on our environment from Chinese manufacturing
    atrocities. As long as they can collect their UN mandated
    Kyoto credits for China, while fouling our country, evidently
    everyone will be just ducky.

  • Anonymous

    Isn’t it amazing what a “contrail” off the coast of California can lead too?
    Nothing like a little saber rattling to clear up economical misunderstandings.
    Sure glad that the Clinton Administration allowed the transfer of advanced missile technology to our “friends” in the far east….

  • Anonymous

    Chinese invasion via 257 Free Trades Zones in America, under the
    jurisdiction of Customs (federal) could be undercover receiving
    locations for foreign military in plainclothes, in preparations for a
    ‘Red Dawn’ since Barack evidently has decided that Hu is his
    new master.

  • Anonymous

    2 million Tibetans died when the Chinese invaded and began their hostile
    occupation of that country. Forced sterilizations and abortions are conducted
    on Tibetans to the present day, in a genocide. Torture of Falon Gong
    practitioners in China includes beatings, electrical, immobilization on torture
    devices for multiple days without respite for toilet activities, and immersion
    in raw sewage. It includes men and women. Falon Gong is a form of meditation,
    with simple exercises.
    Anyone caught doing these exercises or appearing to be practicing
    Falon Gong is arrested and tortured by Chinese government officials
    in China.

  • Anonymous

    Hu has announced to America that a foisting of Chinese youth on America
    is a good thing for both countries, in debate the Barack Obama, parasite
    in the (former) white house, acting as president.

    99.9% of Chinese nationals are atheist communists with a hive mentality.
    Why exactly is an infusion of their youth a good thing for America?

    If Hu’s ‘youth’ are actually military it would certainly be a good thing for
    China, to
    have unlimited access for invasion to Free Trade Zones under cover of
    free trade. The military of China consists of more than 2 and 1/2 times
    armed trained troops than than the entire population of the US.

    I guess we can just tell them about Jesus, and everything will be okay.

  • Knot

    The Chinese government should learn some American-style messaging. Manipulations to their currency should be called ‘quantitative easing’. They could call it QE2 for the sake of people that have trouble with multi-syllabic words..

  • Knot

    Actually, the EU are China’s biggest trading partner. Also, Germany have figured something out, they export more to China (mostly luxury goods) than they import. It might be a good example to follow. Americans bitch about losing jobs to China, well, the trick may be in making quality goods. If money was no obstacle, would you drive a Ford or a BMW?

  • http://twitter.com/Howieisright Howieisright

    Ya they are bailing the Euro out in hopes that they will be paid back in Europe wealthy gold reserves.

  • Johnny Warbucks

    That’s very nice of the US Treasury. I’m sure China appreciates that. No doubt there were very worried about it. Now, is China going to repay the favor by clearing the US of currency manipulation?

  • Johnny Warbucks

    Don’t worry, buddy, Amerikans are excellent as issuing opinions on things they know absolutely nothing about which, at least, 99% of everything. If you dare set them straight, they will willingly shoot you to show you how your opinion and experiences don’t count because, after all, they read a book or may have gone to China once or seen a Chinese movie which qualifies them as experts on the subject. They’re all expert. They can’t even tell you who their president is but they can give you a lesson in history, economics, politics, etc. on your own. It’s called Amerikan exceptionalism. They are entitled to do that because they’re are Amerikan and if you don’t like it, hell, they’ll invade your country for it.

  • Johnny Warbucks

    Wow! It kinda sounds like the US. Over 1.4 million Iraqis were murdered when the US invaded that sovereign country illegally. Today, Amerikan women are dying because they can’t even have a safe abortion. Torture is rampant in the US of both its own citizens and those kidnapped from foreign countries and flown to others like Egypt & Cuba. The torture techniques you describe, including sexual abuse (a big, big thing for depraved Amerikans) is also big with US prisons at home and abroad.

    The right of the people of the US to peaceful protest is protected under their Constitution. Yet, people get regularly attacked, arrested and imprisoned for doing just that.

    Should I continue or does the US sound worse than China yet?

    I’m not defending China. I’m simply showing your hypocrisy. Your country is as bad, if not worse than many so you shouldn’t be throwing rocks at the neighbor’s house when yours has a glass roof.

  • Johnny Warbucks

    Dude, you were warned to wear your tinfoil hat. Extended exposure to the gamma rays emanating from your mother ship can cause brain damage. See? It’s too late for you already

  • Johnny Warbucks

    Psst…psst…It’s already been done. Only the Chinese are not stupid. They had your corporations set up shop in their country so they can reap the rewards and the jobs. You people have been mindlessly buying the products they make from Wal Marts for years now so the invasion is complete. And the joke is on you.

    Back to your tinfoil hat now before you hurt yourself.

  • Johnny Warbucks

    Don’t do unto others as you would have others do unto you. It hurts, eh?

  • http://pulse.yahoo.com/_3QIJ4LGZX6PZOJSD57QIC3NRAA Straw

    Shut it down, troll, just shut it down.

  • Anonymous

    Right. Nod nod, wink wink.

  • Anonymous

    and hell is finally freezing over…

  • http://pulse.yahoo.com/_TRCGTVH7SXIVAQMN6VHRMIG6ZM john wilson

    Right! I also believe Goldman Sachs et al never manipulates commodities. These people couldn’t smell smoke if their ass was on fire.

  • http://pulse.yahoo.com/_PS3ZJ2DB5BBCUXTGVCIECDZT64 One Species

    I’ll lie, and you swear to it.

    -thanks!

  • Anonymous

    The Chinese are NOTHING like Americans.
    I’m hoping to (with others) stop the insanity of the
    Free Trade Zones on US soil where Chinese will
    be imported to manufacture and live, with EB5
    visas, able to take any job anywhere, and pollute
    our nation, in addition to their own.

    I sincerely hope we don’t have to fight our way
    clear of Chinese run checkpoints compliments of
    TSA on every roadway, suffer kidnapping and organ
    harvesting, forced abortion and sterilization,
    because of their invasion but that is who they
    are.

    The governors and mayors who are granting land
    parcels (30,000 acres in Boise) are insane for
    their actions.

    —–Original Message—–

  • Anonymous

    Playing naive American boy is so not charming.
    I can already imagine the look on your face the first
    time you are hounded to death by anti-American
    forces on US soil, in your neighborhood.

    Stand up for the Constitution and your rights,
    before it’s too late, dude.

  • Anonymous

    THIS, has not yet been done. Viral and defeat this action by mayors
    and governors in your state.

  • http://twitter.com/Howieisright Howieisright

    It has been done when they built rail roads and in San Fransisco called China town.
    Johnny knows best better get that tinfoil hat on.

  • Anonymous

    Huh? Dude, turn off the Glen Beck. China has kicked our asses royally in green energy.
    They have invested more in green energy than the rest of the world combined.

  • BuzzCoastin

    As an Amerikan expat living in Beijing, I couldn’t agree more. Don’t get me wrong, China ain’t perfection, but the Land of the Free ain’t either. And it should be noted that it is American companies like Apple that manufacture & import from China which both creates a trade deficit and takes jobs from Americans. The Chinese are only too happy to help Americans screw Americans.

  • Anonymous

    When you refuse to place events in proper historic reference
    you really cheat yourself.

    The Chinese of today will import SARS, enormous cockroaches
    (by bringing in eggs) the hive mentality of acceptance of high
    density living quarters, many used to less than 400 sq. ft.,
    acceptance of abortion by government remand, communist
    ideals and philosophy, an arrogance unparalleled even by
    Obama, children who find superachieving by squashing all
    elements of individuality in their personalities, and an indifference
    to the environment. China is the most polluted nation in the
    world from manufacturing byproducts of a range of toxins,
    and is impacting the planet’s atmosphere with that pollution.

    A land tract of 30,000 acres will accommodate half a million
    Chinese. Adjacent to a world class raptor refuge, that would
    be extinguished. There is not enough water/sewage, and not
    nearly enough capacity of electricity to support a community
    of half a million of any race, much less foreigners who don’t
    really have the right to be here if the community does not
    want them here.

    Repressive, noisy, dirty, rat eating Chinese are not a good
    fit for Boise. The reason there are no asians here now
    after so many came to build the railroads is because
    the Boise forefathers shot them all as they lay sleeping
    in their camps when the jobs were over. The reason was
    to eliminate opium dens, whorehouses, and intermarriage
    of their daughters with them.

    The reason the Chinese were accepted in San Francisco,
    in the 1800′s, is because San Francisco was already
    a slime pit and welcomed opium dens, and whorehouses.

  • Anonymous

    The Chinese have clearly (and by verification in newspaper
    publication) become interested in the relatively unpolluted
    US (compared to China) so they can manufacture here,
    trade their investment dollars for gas tax credits,
    because THEY are signed onto Kyoto and the
    US isn’t.

    It’s unfortunate that you cannot discern between
    propaganda and truth.

    Every publication from National Geographic to
    NPR has broadcast the extent of environmental
    pollution in China, and the complete lack of regard
    for environment that exists there.

    That is what you want for the US?

    —–Original Message—–

  • Johnny Warbucks

    A troll accusing someone else of being a troll. ROFL! Rich!

  • Johnny Warbucks

    WTF?

    Too late for that tinfoil hat, I see.

  • Johnny Warbucks

    Before you hurt yourself beyond any possible hope, I should tell you that your country owns the Chinese over 895.6 BILLION dollars. Now, you can go back to sleep. Or kill yourself before the “anti-Amerikan forces” come to your neighborhood to collect what you owe them. Either way, I really don’t care.

  • Anonymous

    Before you die of constipation of the brain, diarrhea of the mouth,
    (or keyboard) the debt to China that we owe, (not own) could be
    dissolved in 90 days with very moderate tariffs on imports.
    Even WalMart shoppers such as yourself could afford the extra
    few cents for the chunks of toxic plastic.

    But thank you for excluding yourself from some sort of claim
    to the US and designating it as MY country. We don’t need trash
    like you here.

  • http://pulse.yahoo.com/_2FZKFYOOVF2JMXR6UU2LB5AB2Q Rider I Anti-Economic Warfare

    We need to worry about the Hartle Taft act data and stats. However, we have no stats on the reaction of the US towards a neo mercantalist that is not properly protected against. So, along with that the Hart Taftly act. It is difficult, I am looking for the report write now to write my professional response to the report. So far I have not found it, I have not been to the treasury web page yet though.
    http://rideriantieconomicwarfare.blogspot.com/

    I will take into account the idea that the Taft act caused along with not takening proper actions in which the allowance of free trade by the worlds biggest neo mercantalist economy will have more impacts on the US than helping her gain more trade by allowing a stronger domestic US free enterprise base. As Locke and Smithian Said Communism is not fair or free trade, it is protectionism and slavery at its finest, that is paraphrased.

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