BIZCHINA / Top Biz News
US welcomes rise in China currency
(AP)
Updated: 2006-05-16 06:18
The United States, which has been coping with a record-high trade deficit
with China, welcomed the rise in that country's currency, called the yuan
or the renminbi.
A clerk at an foreign currency exchange desk at a hotel shows Chinese
yuan banknotes in Shanghai, China, in this July 22, 2005 file photo.
China's official exchange rate rose Monday, May 14, 2006 to 7.9982 yuan
per US dollar, its highest level since a revaluation in July, the
government said. [AP]
"Greater flexibility in China's exchange rate is something we've long
advocated," Treasury Department spokesman Tony Fratto said Monday in
response to the appreciation in yuan.
China's official exchange rate broke through the psychologically
important 8 yuan per US dollar level Monday, its highest level in more
than a decade. Traders were hopeful the move may signal Beijing's
willingness to allow its currency to appreciate faster.
Any evidence of greater exchange-rate flexibility "is something we
certainly welcome," Fratto said.
The Bush administration has been prodding Beijing to let its currency
float more freely with market forces.
US manufacturers say China is keeping its currency artificially low,
making Chinese goods cheaper in the United States and US-made goods more
expensive in China.
American manufacturers say the current system has hurt exports from the
US and contributed to the loss of US factory jobs.
Sen. Chuck Schumer, D-N.Y., called Monday's movement in the yuan "good
news but only if it portends further movement."
Bowing to pressure, China announced last July that it would stop linking
the yuan to the dollar. Although the United States applauded the move at
that time, it has repeatedly said China needs to do more to revamp its
currency practices.
Last week the Treasury Department in a report to Congress complained that
China is moving too slowly to revamp its currency system. However, the
administration declined to brand the country a currency manipulator �� a
decision that irked manufacturers, labor unions and other critics.
If the administration had made a finding that China was manipulating its
currency to gain an unfair trade advantage, that would have triggered
talks between the two countries. China also might have faced trade
sanctions.
(For more biz stories, please visit Industry Updates)
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