US yuan bill risks trade war: Chinese state media

Beijing has a history of allowing the yuan to strengthen
slightly when it expects to come under pressure
© AFP/File

AFP

BEIJING (AFP) – The United States risks a trade war at a time of global economic uncertainty if it passes a bill to punish China over alleged currency manipulation, state media said Monday.

The bill’s US backers accuse China’s leaders of getting away “with economic murder” by keeping the yuan, and the country’s exports, cheap.

Beijing counters the claim by saying its currency has risen 20 percent against the greenback since 2005.

The bill aims to make it harder for the US Treasury Department to avoid labelling Beijing a currency cheat, which could trigger sanctions, while making it easier for US companies to seek retaliatory tariffs on Chinese goods.

“It’s crystal clear that labelling China as a ‘currency manipulator’ is just a cheap excuse for some in Washington to launch a protectionist war,” said the commentary carried on the official Xinhua news agency.

“It’s normal that China and the United States, like any two other countries in the world, have trade disputes, especially in an ever-globalised world. It said “…the point is to stay rational and conscientious and hold negotiations whenever such friction arises, and avoid unilateral action such as pushing the yuan bill that would do no good to anyone.”

The commentary was released just hours ahead of a key procedural vote in Congress set for 2130 GMT Monday, which the bill’s sponsors expect to go in their favour.

But the bill faces an uphill fight in the House, where Republicans have no plans to bring it up for a vote unless the issue flares up as a core dispute in the November 2012 presidential races, several aides have said.

The nations have repeatedly clashed over the yuan but in May the US Treasury Department declined in a formal report to brand Beijing a currency manipulator.

China has a history of allowing the yuan to strengthen slightly when it expects to come under heightened pressure over the value of its currency.

Last week China’s foreign ministry spokesman Hong Lei urged US lawmakers to “safeguard the smooth development of China-US economic relations” by refraining “from pushing through the bill.”

© AFP — Published at Activist Post with license

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