U.S. knocked for tolerating cheap yuan

COLLEGE PARK, Md., Nov. 27 (UPI) -- A Maryland economist wants the White House to become more assertive in its dealings with China over alleged currency manipulation.

Peter Morici, former chief economist at the U.S. International Trade Commission and currently a University of Maryland economist, said many U.S. firms cannot export to China or compete with Chinese products in the United States because China maintains an artificially undervalued currency, imposes high tariffs on imports, offers subsidies to locate production in China, limits what foreign investors may buy outside China and enforces other industrial policies to suppress imports and boost exports.

"Less than half of China's price advantage is created by inexpensive labor," he said. "The rest, quite plainly, comes from chiseling and cheating on the rules."

Morici singled out for praise a bill by Reps. Duncan Hunter, R-Calif., and Tim Ryan, D-Ohio, which would permit U.S. industries injured by an undervalued yuan to petition for countervailing duties.

He said the Hunter-Ryan bill would either "motivate China and others to quit cheating on the rules of global commerce, or undo some of the harm to the U.S. economy by partially rebalancing trade and recouping some lost gross domestic product."