Greenspan to Senate: Can the currency beef

June 23, 2005 at 1:58 PM
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WASHINGTON, June 23 (UPI) -- Federal Reserve Board Chairman Alan Greenspan and Treasury Secretary John Snow told U.S. senators Thursday to lay off China about the value of its currency.

Greenspan, in comments to the Senate Finance Committee, warned lawmakers that there was little evidence a stronger Chinese yuan would boost U.S. manufacturing jobs or ease the U.S. trade deficit, MarketWatch reported.

Instead, a cheaper yuan could cause the United States to import more items from other Asian countries.

At the same time, Greenspan said a more flexible currency would help China achieve economic stability and could aid world economic growth.

He also said any significant boost in U.S. tariffs that substantially reduces overall U.S. imports by keeping out competitively priced goods could undercut the U.S. standard of living.

Snow, meanwhile, warned that any punitive legislative action against China, such as tariffs, would be counterproductive.

Some U.S. lawmakers are threatening to push tariffs as a way to retaliate for an "artificially" low Chinese currency.

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