US must confront Chinese currency manipulation: US Senator.

 

 

March 17, 2010 (hamsayeh.Net) - US legislators warned China on Tuesday that it could face stiff trade sanctions if it does not let its currency – the yuan – to appreciate against the US dollar.

 

This unprecedented warning follows a series of unfriendly moves by the Obama Administration against China’s growing influence in the world. Some 14 US senators want to keep the pressure on China to allow the yuan raise its value against the US dollar.  A higher valued yuan would permit US manufactured goods a more competitive exposure in international markets.

 

The 14 senators say an undervalued Chinese currency is hurting US economy leading to loss of jobs for the Americans. But this argument contradicts United States’ own long held mantra in free-market capitalism, based on the law of supply and demand. Moreover, the new legislation if implemented would be considered a protectionist measure leading to future trade wars with all other industrial economies beside the one with China.

 

A Democratic Senator, Chuck Schumer, told reporters that China must succumb to Washington’s demands. On Monday, China’s Prime Minister, Wen Jiabao reassured the US that his country’s currency evaluation system is going to stay the way it is. According to Schumer Wen’s comment was the last straw and therefore the US must force China accept new terms or face the consequences.

 

‘When Premier Wen said that China's currency is not overvalued two days ago, that was the last straw and here we are to tell them we are going to force you to do it - plain and simple,’ he said. ‘There is no bigger step that we can take to promote job creation here in the US than to confront Chinese currency manipulation,’ he added.

 

Once a booming industrial nation, the United States now suffers from what many analysts call a deindustrialization process caused by growing international competitions and the United States own relentless pursuit of casino capitalism.

 

These days the main industry in the US is manufacturing of weapons, bombs and security related items. China’s robust economy on the hand is a vastly diversified system benefiting the country’s population and serving as an engine of growth for all other developing nations. China manufactures high quality yet affordable goods enjoyed by people worldwide.