U.S. congressmen propose foreign currency bill

11 Feb, 2011

A group of U.S. congressmen Thursday proposed a bill to press China to let its currency appreciate faster, a latest move that may harm China-U.S. cooperation.

Sander Levin, a ranking member of the Ways and Means Committee of the U.S. House of Representatives, introduced a legislation entitled “Currency Reform for Fair Trade Act of 2011″ in the House of Representatives.

Meanwhile, U.S. Senator Sherrod Brown is introducing a companion legislation in the Senate, according to a statement from the office of Levin.

The U.S. House of Representatives last September passed a similar bill, but it stalled in the Senate.

Yao Jian, spokesman of China’s Ministry of Commerce at that time, refuted the saying that China gained trade advantages by means of an undervalued yuan.

The outcome of trade between the two countries was instead dependent on the trade and investment structures, he said.

A trade surplus should not be blamed on a so-called undervalued currency, neither should it be used as an excuse for trade protectionism, he added.

Major trading partners of the United States, including China, did not manipulate their currencies to gain an unfair advantage in international trade in 2010, the U.S. Treasury Department said in a report last week.

Since the June 19, 2010 announcement by China’s central bank of greater exchange rate flexibility, its currency, also known as the renminbi (RMB) has appreciated 3.7 percent against the U.S. dollar, or about 6 percent annualized. The renminbi has appreciated some 26 percent in total against the dollar since July 2005 when China began to reform its currency exchange rate regime, according to the report.

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