China voices opposition to Senate currency bill

Oct. 12, 2011 at 1:33 AM
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BEIJING, Oct. 12 (UPI) -- Beijing Wednesday asked U.S. government officials to "firmly oppose" a Senate-approved bill dealing undervalued currencies.

China sees the bill as being specifically targeted at its currency, the yuan.

In a strongly worded written statement on Tuesday's Senate passage of the bill by a 63-35 vote, Chinese Foreign Ministry spokesman Ma Zhaoxu said, "China called on the U.S. government, Congress and various communities to firmly oppose the wrong doing of pressuring (Yuan) exchange rate by way of the domestic legislation, to resist protectionism, and to resist the politicization of economic and trade issues, so as to safeguard the healthy development of China-US economic and trade relations," the official Xinhua news agency reported.

The Currency Exchange Rate Oversight Reform Act approved by the Senate would impose new tariffs on imports from countries whose currency is deemed to be undervalued.

China has long been seen as keeping its currency yuan deliberately undervalued to make its exports cheaper and imports from other countries more costly. Although the yuan has appreciated in recent years, experts say it is still undervalued by about 30 percent, which gives China an unfair trade advantage against major trading partners like the United States.

Although the Senate bill is unlikely to be approved in the House of Representatives and become law, China has been waging a strong campaign against such measures.

China's Ministry of Commerce Wednesday expressed "its adamant opposition" to the Senate bill, Xinhua reported. A spokesman was quoted as saying the Senate vote had seriously violated international regulations and disrupted the world's joint efforts to prop up global economic recovery and curb trade protectionism.

Chinese Vice Foreign Minister Cui Tiankai was quoted as saying, "Should the proposed legislation become law, the only result would be a trade war between China and the U.S. and that would be a lose-lose situation for both sides."

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