China slams U.S. currency bill
A Chinese bank worker counts a stack of 100-yuan notes at a bank in Hefei, east China’s Anhui province on February 27, 2011.
The U.S. Senate’s latest bill, targeting undervalued currency such as the yuan, has angered Chinese officials, possibly igniting a "trade war," CNNMoney reports.
The bill, which underscores the U.S.’s current frustration with its largest trading partner, forces the White House to be more aggressive when seeking tariffs and other penalties against countries with a “misaligned” currency, such as the yuan, the Wall Street Journal reports.
Chinese officials immediately opposed the bill, saying it will trigger a “trade war,” CNNMoney reports.
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“This bill seriously violates World Trade Organization rules, harms bilateral economic and trade cooperation, and does not solve the economic and employment problems in the United States,” said Chinese foreign ministry spokesman Liu Weimin in CNNMoney.
The bill, which received 63 votes in favor and 35 against it, is unlikely to become a law. Recently, the Chinese central bank has intervened in currency markets to drive up the value of the yuan against the dollar, a development in line with U.S. goals, WSJ reports.
Those in favor of the bill argue that Beijing’s policy of holding down the yuan’s value only benefits China’s exporters by acting as a trade subsidiary, WSJ reports. The bill is intended to help U.S. businesses who are hurt by global trade imbalances and lost business to Asian nations, CNNMoney reports.
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But those against the bill say it could lead to retaliation against U.S. companies, possibly sparking a trade war, CNNMoney reports.
China's Ministry of Foreign Affairs spokesperson Ma Zhaoxu slammed the bill as "doing good to nobody, and it will bring nothing but harm!" CNNMoney reports.
President Barach Obama hasn’t fully agreed to the bill yet and warned last week “he didn’t want to pass ‘symbolic’ laws that could be slapped down by the World Trade Organization,” CNNMoney reports.