U.S. Won't Cite China As Currency Manipulator

WASHINGTON (AP) -- The Bush administration has declined to cite China for manipulating its currency to gain unfair trade advantages against the United States.

The finding announced Thursday came despite pressure in Congress for penalties because of America's growing trade deficit with China, which last year hit an all-time high of $256.3 billion (euro165.6 billion), the largest deficit ever recorded with a single country.

In a report it is required to deliver to Congress every six months, the administration said China needed to address the ''substantial undervaluation'' of its currency compared with the dollar. But the report said China did not meet the technical requirements under the law to be designated as a currency manipulator.

The report noted that the Chinese currency, the yuan, has risen in value by 18.4 percent against the dollar since the Chinese government loosened its currency system in July 2005. However, American manufacturers contend the yuan is still undervalued by as much as 40 percent, making Chinese products more competitive in this country and U.S. goods more expensive in China.

Treasury Secretary Henry Paulson had hoped to use a new series of high-level talks with Chinese officials to get the country to move more quickly in addressing not only the currency issue but a number of other contentious trade issues. However, those talks so far have had only limited results.

In the new report, the Treasury Department said, ''China needs to intensify its efforts to rebalance its economy'' by boosting domestic demand to reduce reliance on imports and also by reforming its financial system to allow its currency's foreign exchange value to eventually be set by the markets rather than being controlled by the government.

Deputy Secretary of State John Negroponte faced tough questioning Thursday on the currency issue during a Senate Foreign Relations Committee hearing on U.S. relations with China.

Sen. Benjamin Cardin, a Democrat, said he could not understand why the administration was not taking a tougher approach on the currency issue. Sen. George Voinovich, a Republican, said his constituents were ''livid'' about the China trade issue. He accused the administration of failing to get tough with Beijing because the administration wanted Chinese support for dealing with North Korea over nuclear weapons.

In a speech in Beijing, Commerce Secretary Carlos Gutierrez warned that Chinese and U.S. officials needed to guard against rising economic nationalism in both countries, calling it a ''troubling trend'' that threatened progress on building economic partnerships between the two countries.

AP Diplomatic Writer Barry Schweid contributed to this report.

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Currrency manipulator 5/16/2008 12:52:00 PM Another Bush screw up! What, does he have oil investments in China too?
The debt we owe 5/16/2008 12:59:00 PM A lot of people don't realize that China owns so much of our national debt that our response to this won’t be much better than a marionette trying to slice its own strings off. Still, a popular opinion is that China will eventually "do the right thing" because a weak US trading partner won’t help its cause in the long run. My own opinion is that we never should have gotten into the sellout of our manufacturing base to begin with. As we can see the cheap labor didn’t exactly pay off now, did it?
China 'trade' 5/16/2008 12:59:00 PM So WHY would the US want to kill the golden egg goose? Because our leaders are really shortsighted and look to the interests of the few (wealthy-connected) rather than the rest of the citizens/ taxpayers. A lot of the gains from the China business are had by American businesses; at the loss of American workers jobs. China continues to 'lend' to the US and thereby 'keep inflation' lower than it would have been with the federal WASTE on tax cuts AND the Iraq OIL 'war'. We NEED greater economic nationalism, NOT guard against it. Actually we need to guard against the vested interests in the US. {example: a few years ago while in a 3rd world country I heard the minister of health and water categorically stating that for the 'next 10 to 15 years' people will have to continue buying bottled water. Later it turned out that his family owned a major share of the TWO largest water bottling companies in the country. We as the superpower, world Numero uno are no different.
China, Trade, Oil, and economics 5/18/2008 6:37:00 AM Interesting to me it is, that the same folks decrying "Bush" economic deals with China also blame his admin for its failure AND accuse him of profiteering on oil. Let's examine this, now. The entire Bush family are pikers in oil compared to such names as Kennedy, Kerry, to say nothing of Senator Lieberman. Profiteering goes way way back, but when the economy needed a boost after the previous "recession", trade agreements with China replaced job growth in the US. Real jobs, remember? http://archive.newsmax.com/archives/articles/2001/3/20/190717.shtml outlines it better than I can, but maybe you remember your wages not going up so much in the last 12 years as the price of things going down? That's because Chinese labor had "preferred nation" trade status compliments of Clinton. They run the former Long Beach Naval Base to import the stuff you used to make, that you were buying with the refinance money from your house price inflating. Lucky you, now you get to pay it all back. Don't blame Bush though, it all started a long time before him.
Chinese practices that steal US assets 5/19/2008 10:43:00 AM The WTO penalizes the US if we assist our economy in world trade; however, no one has the guts to point out that any nation, including our friends or former enemies, whose leaders gain economic advantage by making their workers exist on less than an adequate wage or guilty of giving an unfair advantage to themselves in world trade. When we as a people take back our nation from the world dealers whose wealth comes from trading in imported goods sold in this and other civilized nations, we will have a compensating tariff places on all such slave labor type goods which we are allowed to do per WTO rules if we have guts enough to point out to the other members of the WTO that they can not have it both ways. If labor is not part of the cost of producing and selling goods then neither are money given to assist advertising, financing, and shipping products to foreign markets. Even our friends in Australia are willing to insist that their assistance to their wine industry will continue so long as this labor cost and money manipulation exists. Note that Australia has not had any penalties put against it because the members of the WTO know full well that Australia will take back any penalties by putting an export tax on their raw material exports. It is high time that we recognize that our so-called leaders in both parties have failed in their oath to protect the USA from all enemies both public and private. Waiting until the last ten percent of our manufacturing work force is left is too late for correct action. The time is now. A deceased friend who had been a Mfg. plant manager in Hungary until the 56 revolt, stated that the USA was naive to think that giving our wealth away won us friendship from world. Rather, the world thinks we are fools, but goes along with the charade in order to get their share of our wealth. Wal-Mart's sales are about what our deficit is with China. Go to Wal-Mart and look for an American made manufactured good outside of fertilizer,chemicals, or similar raw material that is energy intensive. Note that Hillary Clinton once served on the Wal-Mart Board of Directors when she was the Governor of Arkansas's wife. Now she says that she will take action against the same actions that existed when she was on Wal-Mart's Board of Directors. If it was a mistake not to oppose those actions then, who should pay for those mistakes? The Bush dynasty can't snicker, they have had two presidents who have gone right along with the effort to destroy the US Manufacturing sector and middle class with their One World philosophy. We need a clean sweep with a new broom! Ross Peroit was dead right, but the intelligentsa and bureaucrats made him figuratively dead. Those people who voted then for either of the two major party candidates sold their birth rights for a figurative bowl of soup.

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