Chinese School - China warns US Congress on trade bill

BIZCHINA / Center

China warns US Congress on trade bill

(Reuters)
Updated: 2007-06-13 11:20

An employee arranges yuan notes at a branch of the China Minsheng Bank in
Nanjing, capital of east China's Jiangsu province in this April 28, 2006
file photo. [Reuters]

China fired a warning shot at US lawmakers on Tuesday, saying that
proposed legislation to pressure Beijing to step up exchange rate reform
risked politicizing trade and would not sway its priorities.

With US Congress members increasingly riled by their nation's trade
deficit, a group of senators is expected to unveil legislation this week
seeking to pressure Beijing to revalue its yuan currency more quickly and
so make its exports more costly.

China's Ministry of Foreign Affairs, reluctant in the past to wade into
trade disputes, told the US lawmakers to back off.

"As for whether the renminbi exchange rate is high or low, the US
Congress believes it is too low," ministry spokesman Qin Gang told a news
conference, referring to the yuan by its official name.

"But whose standard is this? It's the United States'. But ultimately
China's renminbi exchange rate must suit Chinese realities, and it must
benefit China's and the world's economic development."

"The US Congress could pass this legislation which will lead to the
problem of higher tariffs on Chinese goods... If this happens then the
Chinese departments concerned will make a response."

China's warning over the US legislative moves comes as the two countries'
trade-sparring risks turning into a shoving match that could spill over
into next year's presidential contest.

Many US lawmakers and manufacturers blame China's exchange rate controls
for holding down the value of the yuan and fuelling the large US trade
deficit with China.

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