US will act if China does not revalue yuan

[SandEagle]

Representatives committee chairman on Monday warned the United St
US will act if China does not revalue yuan-lawmaker

Mon Apr 19, 2010 2:06pm EDT




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• Obama seeks market-based yuan; Congress impatientMon, Apr 5 2010
• U.S. says Obama seeks market-based Chinese currencyMon, Apr 5 2010

WASHINGTON, April 19 (Reuters) - A U.S. House of Representatives committee chairman on Monday warned the United States will take action if China does not begin steps in coming months to raise the value of its currency.
Global Markets
"The G20 are meeting in a couple of months. It's clear to me the (Obama) administration is endeavoring to try to bring about a change" in China's currency, Ways and Means Committee Chairman Sander Levin said at the National Press Club.
"They're going to try to use a multilateral process to help bring that about. If it doesn't work, the U.S. will act. I have no doubt about it. I think the administration will act and I think the Congress will act," the Michigan Democrat said.





I wonder how Obama plans on accomplishing this. Start a war with China? Ban chinese imports? Pray?

 

[EagleKeeper]

When it comes from the Obama administration then I will take notice on what is said and how such might be implimented.

Many a Congressperson will posture and they have no impact/standing

 

[Hacp]

What the fuck does take action mean? Invalidate China's treasuries?

 

[irishScott]

When it comes from the Obama administration then I will take notice on what is said and how such might be implimented.

Many a Congressperson will posture and they have no impact/standing

This. And lol at the "it's clear Obama is trying to bring about a change." REALLY? NO SHIT!!!

 

[Schadenfroh]

Please no currency / trade war with China right now, OK?

Yes, they are manipulating their currency and doing several things they should not be doing, but now is not the time.

 

[SandEagle]

how come IHV, JS80, and SammyAsshair don't post in any non-ME related threads? i have some good material that i'm holding out on

-------------------
YHPM


Common Courtesy
Anandtech Moderator

 

[Ozoned]

how come IHV, JS80, and SammyAsshair don't post in any non-ME related threads? i have some good material that i'm holding out on

wrong about js80
wrong about Ihateviruses
wrong about sammyashair

 

[Elias824]

They are keeping the currency value low so that they can continue to grow as an exporter of goods. This plays into the whole Chinese are taking my jobs idea and they like it that way. The other issue is that its not really sustainable for them to grow their economy solely based on exports to other countries.
http://articles.courant.com/2010-03...omy-chinese-cities-national-people-s-congress

 

[theeedude]

What the fuck does take action mean? Invalidate China's treasuries?

Start printing more money Let's see how long China can keep their peg before their people riot from huge inflation we export to them.

 

[ShawnD1]

Start printing more money Let's see how long China can keep their peg before their people riot from huge inflation we export to them.

Let's see if I have this right:
1) China unpegs its currency and lowers the value. China suffers inflation due to lower currency value.
2) USA prints money. China suffers inflation due to lower currency value.

:hmm:

 

[Double Trouble]

When it comes from the Obama administration then I will take notice on what is said and how such might be implimented.

Many a Congressperson will posture and they have no impact/standing

This. Congressmen and senators can posture and yap all the want, they are not in a position to do anything.

Second, I don't think there's a whole lot the US can really do at this point, since it has no leverage. Someone has to lend all that money to the US to finance the record deficits ... and if not for China's lending, we'd be in even bigger do-do.

 

[tvarad]

This. Congressmen and senators can posture and yap all the want, they are not in a position to do anything.

Second, I don't think there's a whole lot the US can really do at this point, since it has no leverage. Someone has to lend all that money to the US to finance the record deficits ... and if not for China's lending, we'd be in even bigger do-do.

It was OK for China to peg it's currency to the dollar earlier in it's development as such actions did not make a dent in the deficit. Now that it's economy has grown by gargantuan proportions, it is high time the peg was removed and it's currency allowed to float (perhaps within a reasonable band to keep out currency marauders). The glaring artificial difference between the actual value of Chinese currency and it's official value is very destabilizing on world markets which rely on free trade to work. Large U.S. trade deficits are as detrimental to China's interests as they are to the U.S..

I don't think the Chinese are ignoring these threats even when they issue counter-threats. If the U.S. imposes tariffs on Chinese goods to bring their prices in par with their actual value, a full-blown trade war might ensue which is in no one's interests. After some face-saving gestures, they will act and raise the value of it's currency.

 

[JS80]

how come IHV, JS80, and SammyAsshair don't post in any non-ME related threads? i have some good material that i'm holding out on

-------------------
YHPM


Common Courtesy
Anandtech Moderator

I have great disdain for the chinamen as I have posted in non-Jew hating threads. Just do a forum search for "chinamen." I'm pretty sure I'm the only one using that term. Trust me on this.

 

[theeedude]

Let's see if I have this right:
1) China unpegs its currency and lowers the value. China suffers inflation due to lower currency value.
2) USA prints money. China suffers inflation due to lower currency value.

:hmm:

If China unpegs currency it's going to pop up in value, lowering inflation. They are buying up US treasuries to keep their currency weak relative to the dollar. If USA prints money and devalues dollar, China will have to devalue yuan to keep the peg, resulting in higher inflation.

 

[JEDIYoda]

What the fuck does take action mean? Invalidate China's treasuries?

No Obama will take your allowance away for being an idiot...lol

 

[theflyingpig]

A U.S. House of Representatives committee chairman on Monday warned the United States will take action if China does not begin steps in coming months to raise the value of its currency.

HAHAHAAHAHAHAHAHAHAHAHAHAAHAHAHAHAHAHAHHAAHAHAHAAAA!!!!!!!! What complete and utter bullshit. This administration doesn't have the balls to do anything more than write stern statements of disapproval. The entire world knows that the fools in Washington won't take action against anyone doing anything. That's the problem with having such weak leadership -- your threats mean absolutely nothing. Everyone knows this.

 

[llee]

1. The US has no jurisdiction on this matter.
2. Those who bring up a 'job stealing' argument should understand that that is the economic foundation of our country, capitalism.
3. China sold off most of its US debt to Japan recently, meaning that they will be more apt to changing their stance on currency values.
4. Arguments against China's policies imply that the US doesn't manipulate its own currency, which is false.
5. Scape-goat anyone? Western media bias has been continuing a long trend of China 'this' and China 'that'. They are carving it into the next 'big red'. Most news articles you will find will always be negative regardless of the topic and this media brainwash is evidently taking hold in America. Nobody needs this crap, the politicians should be spending more time representing their people than playing ambassador.

 

[Double Trouble]

It was OK for China to peg it's currency to the dollar earlier in it's development as such actions did not make a dent in the deficit. Now that it's economy has grown by gargantuan proportions, it is high time the peg was removed and it's currency allowed to float (perhaps within a reasonable band to keep out currency marauders). The glaring artificial difference between the actual value of Chinese currency and it's official value is very destabilizing on world markets which rely on free trade to work. Large U.S. trade deficits are as detrimental to China's interests as they are to the U.S..

I don't think the Chinese are ignoring these threats even when they issue counter-threats. If the U.S. imposes tariffs on Chinese goods to bring their prices in par with their actual value, a full-blown trade war might ensue which is in no one's interests. After some face-saving gestures, they will act and raise the value of it's currency.

I don't disagree with you, though I'm curious to see if China actually does increase the value of the yuan. I was just saying the US really doesn't have any leverage, other than threatening tariffs, which would seem to be a very counterproductive measure for both sides.

The world was so much better off when China's economy was smaller..... It's one thing to deal with the communist dictators over there on our terms when it suits our needs, but another to try and handle the communist dictators when they hold a lot of the cards.

 

[rchiu]

It was OK for China to peg it's currency to the dollar earlier in it's development as such actions did not make a dent in the deficit. Now that it's economy has grown by gargantuan proportions, it is high time the peg was removed and it's currency allowed to float (perhaps within a reasonable band to keep out currency marauders). The glaring artificial difference between the actual value of Chinese currency and it's official value is very destabilizing on world markets which rely on free trade to work. Large U.S. trade deficits are as detrimental to China's interests as they are to the U.S..

I don't think the Chinese are ignoring these threats even when they issue counter-threats. If the U.S. imposes tariffs on Chinese goods to bring their prices in par with their actual value, a full-blown trade war might ensue which is in no one's interests. After some face-saving gestures, they will act and raise the value of it's currency.

Stop blaming China for all US's problem. China's currency is not only undervalued relative to the USD, it is undervalued relative to all currencies. The rest of the world manage to have some kind of balance in trade. It's only the US which as so huge a hole in trade imbalance that the difference between the US deficit and the second worst is so huge it isn't even funny. (see link below, you gotta scroll all the way to the bottom to find US)

http://en.wikipedia.org/wiki/List_of_countries_by_current_account_balance

Instead of blaming China, you and all those politicians need to look at why US is not competitive anymore in the world market. Hint, keep outsourcing your industry and losing skills and capability isn't helping.

 

[Anarchist420]

I think the best idea is to add a tarriff (somewhere from 7-10&#37 on Chinese goods and to revalue our currency and give tax breaks for buying Japanese goods. It doesn't require any negotiating and would cause American and Japanese economic growth, and bring in tax revenue. Also, people who don't pay the income tax would be paying at least a little at the Federal level.

Of course, Obama's just going to be a dumbass and monetize the debt rather than cut spending and pay it off via taxes and sale of American governmental assets.

 

[DesiPower]

Oh please! its such a load of bull, only way US will "act" is lower its already bent over and unclenched a$$ so that the midgets can reach it.

 

[brxndxn]

1. The US has no jurisdiction on this matter.
2. Those who bring up a 'job stealing' argument should understand that that is the economic foundation of our country, capitalism.
3. China sold off most of its US debt to Japan recently, meaning that they will be more apt to changing their stance on currency values.
4. Arguments against China's policies imply that the US doesn't manipulate its own currency, which is false.
5. Scape-goat anyone? Western media bias has been continuing a long trend of China 'this' and China 'that'. They are carving it into the next 'big red'. Most news articles you will find will always be negative regardless of the topic and this media brainwash is evidently taking hold in America. Nobody needs this crap, the politicians should be spending more time representing their people than playing ambassador.

1. The US has every jurisdiction it deems necessary to protect its own interests. If the US wants to increase tariffs to offset China's currency manipulation, it can do so.
2. No, capitalism goes both ways. If China decides they are keeping their currency at a rate that only favors exports, then China is not a favorable trading partner.
3. It does not matter who owns the debt - currency manipulation is a seperate issue. The US has a vast amount of alternative leverage besides debt.
4. Every country with a central bank manipulates its currency in some way. When China manipulates it in a way that is only favorable to China at the expense of other countries and the free market, the argument speaks for itself.
5. Dealing with China is the responsibility of our politicians. China undermines our own wages since their workforce works for nothing compared to ours - decreasing our standard of living. China steals our technology when we work with them. China practically encourages intellectual property theft. China forms state-run companies to compete against foreign companies investing there while stealing their technology. China's citizens accept substandard working conditions and wages because their government manipulates their access to information. China's manufacturing is low quality. China is in the middle of a dangerous bubble - continued construction with no demand - where the collapse could be financially harmful to the rest of the world.

China's reputation is only going downhill from here - unless they make major changes in policy.

 

[piasabird]

Just ban all Chinese Imports. Of course after that it might be hard to buy a motherboard or processors or memory or borrow money to keep the government running. Of course we could renig on our debt like some socialiast and communist countries then our credit rating would fall and we would have to pay more on the debt we owe due to a higher interest rate on our debt. So how would any of this benefit us?

 

[llee]

1. The US has every jurisdiction it deems necessary to protect its own interests. If the US wants to increase tariffs to offset China's currency manipulation, it can do so.
2. No, capitalism goes both ways. If China decides they are keeping their currency at a rate that only favors exports, then China is not a favorable trading partner.
3. It does not matter who owns the debt - currency manipulation is a seperate issue. The US has a vast amount of alternative leverage besides debt.
4. Every country with a central bank manipulates its currency in some way. When China manipulates it in a way that is only favorable to China at the expense of other countries and the free market, the argument speaks for itself.
5. Dealing with China is the responsibility of our politicians. China undermines our own wages since their workforce works for nothing compared to ours - decreasing our standard of living. China steals our technology when we work with them. China practically encourages intellectual property theft. China forms state-run companies to compete against foreign companies investing there while stealing their technology. China's citizens accept substandard working conditions and wages because their government manipulates their access to information. China's manufacturing is low quality. China is in the middle of a dangerous bubble - continued construction with no demand - where the collapse could be financially harmful to the rest of the world.

China's reputation is only going downhill from here - unless they make major changes in policy.

1. I meant that the US has no jurisdiction to change Chinese policy over this. They can of course change their own. Slight misunderstanding.
2. True, but if the US doesn't like these foundations there is nothing holding them back from moving to another nation. It's not like China is pointing nukes at us forcing us to trade with them.
3. This wasn't actually an argument, just a fact.
4. Eight years ago the exchange rate was approximately 8 yuan = 1 dollar. Now the exchange rate is approximately 6 yuan = 1 dollar. Also, see response 2.
5. My objection is when representatives and senators make them the scapegoat for state issues. Most workers in China work for an entire month only to scrape by with about 5 yuan in the city back in the 70s, now they earn hundreds of yuan in the same amount of time. Only fractions of this can be blamed on inflation. Intellectual theft happens everywhere, besides the blame would then fall on the people that live there and thus irrelevent to this discussion. Can you give me an example of a state run company that competes with a US equivalent? Contrary to belief, their standard of living has dramatically improved, albeit obscured from a US perspective. China is already experiencing an economic depression. The growth rate has shrunk to like 10% compared to 25% last year. There are thousands of collage grads that don't even have work right now.

Just ban all Chinese Imports. Of course after that it might be hard to buy a motherboard or processors or memory or borrow money to keep the government running. Of course we could renig on our debt like some socialiast and communist countries then our credit rating would fall and we would have to pay more on the debt we owe due to a higher interest rate on our debt. So how would any of this benefit us?

I'd like to see Obama do that. Such an action would deplete any political capital that he has, alienate him from his own party and open up a target for republicans to attack. Further national disorder is NOT what we want.

I'm not trying to be all pro-china, but someb criticism that I hear is just bogus.

 

[theeedude]

We should just decide what ratio of dollar/yuan we want and print enough dollars to make it happen.