US Treasury Secretary Timothy
Geithner Urges China to Allow
Day Trending today is a New York Times story from Washington about US Treasury Secretary Timothy F. Geithner laying out the concerns and complaints before the US Senate Banking Committee about the trouble with China devaluating its currency, and the hardships that presents for the US economic recovery.
Senators from both sides of the aisle testifying at a hearing Thursday expressed concern over the Obama administration's reliance on persuasion and diplomacy yielding little results. Christopher J. Dodd, who incidentally is not running for re-election this fall, a Democrat from Connecticut is the Chairman of the Banking Committee and was very candid with Geithner.
"There is no question that the economic and trade policies of China represent clear roadblocks to our recovery." Dodd claimed.
"I've listened to every administration, Democrats and Republicans, from Ronald Reagan to the current administration, say virtually the same thing. And China does basically whatever it wants, while we grow weaker and they grow stronger," Dodd added.
The Republican view was much the same, as stated by Senator Richard C. Shelby of Alabama, "There is no question that China manipulates its currency in order to subsidize Chinese exports. The only question is: Why is the administration protecting China by refusing to designate it as a currency manipulator?"
China's response? Foreign Ministry spokeswoman, Jiang Yu, said at a news conference, "I would point out that the appreciation of the renmimbi will not solve the U.S. deficit and unemployment problems."
Geithner told the committee that he agreed with the International Monetary Fund (IMF) that China's currency was "significantly undervalued" and mentioned the country's rapid growth in income and productivity relative to its trading partners. Just short of calling out China formally, Geithner said the Treasury would "take China's actions into account as we prepare the next Foreign Exchange Report," due October 15.
The secretary outlined a few harmful practices such as the mass violation of intellectual copyrights and the practice of 'indigenous innovation' before concisely stating a strategy to account for these Chinese business and monetary practices.
"We are very concerned about the negative impact of these policies on our economic interests, and are pursuing a carefully designed, targeted approach to address these problems," he said.