More reactions to and reports on Tim Geithner’s and the Obama administration’s plans for China. From AP:
Geithner’s comments raise the possibility that the Obama administration will take a tougher line with China than former President George W. Bush did. The previous administration refused to cite China as a currency manipulator in a report that Congress requires the Treasury Department to prepare twice a year.
Instead, former Treasury Secretary Henry Paulson insisted that the best way to get China to revalue its currency was through diplomatic engagement. Paulson began the Strategic Economic Dialogue, high-level discussions that have been held twice a year starting in late 2006.
During this process, China did allow the value of its currency to rise by 21 percent. But American manufacturers say that the Chinese yuan is still significantly undervalued, making Chinese goods cheaper for U.S. consumers and American products more expensive in China.
An article in Xinhua quotes experts who say that the move is to be expected from a new administration facing serious economic problems at home:
Geithner’s comment was just a “cliche”, aiming to try out the Chinese government’s response, said Zuo Xiaolei, senior analyst with the Beijing-based Galaxy Securities.
The move was within expectation, Zuo said, as “the new Obama administration is facing serious job losses and economic recession while the Democrats have tended to trade protectionism.”
The U.S. unemployment rate hit a 16-year high of 7.2 percent in December, according to the governmental statistics.
* “China tells Obama’s Treasury pick it is not manipulating currency” from AFP
* “Obama’s strong dollar policy may be for real” from Reuters
* “U.S. Wrong to Claim China Curbing Yuan Gain, Hua Says” from Bloomberg.