Obama Weighs in on Chinese Currency Issue
WASHINGTON — Sen. Barack Obama, the Democrats' presumptive presidential nominee, joined 10 senators in urging Treasury Secretary Henry Paulson, Jr. on Monday to continue pressuring the Chinese government to stop undervaluing its currency during two days of high-level talks between the two countries that begin today in Annapolis, Md.
The senators sent a letter to Paulson outlining their concerns about China's currency, which critics claim is undervalued by 15-40 percent and puts U.S. companies out of business. Congress has been pressuring the Bush administration for the past few years to label China a currency "manipulator," which could potentially lead to punitive sanctions by the World Trade Organization. Several legislative efforts that would have pressured China to revalue its currency or face sanctions, have stalled in Congress and are not expected to gain steam in an election year.
China's currency has also increased in value by 19.8 percent since it ended its peg to the dollar in July 2005, taking some of the steam out of Congressional efforts to push the issue. In their letter, the senators argued that the 19.8 percent increase in the Chinese Yuan is "nominal" and pointed to what they said is a more accurate appreciation in China's currency of 13 percent, based on a trade-weighted average.
The Bush administation, led by Paulson, has refused to penalize China, opting instead for "quite diplomacy"and prodding the Chinese through the high-level talks, known as the Strategic Economic Dialogue, that kick off today. Paulson will meet with Chinese Vice Premier Wang Qishan and other members of the Chinese government. U.S. Trade Representative Susan Schwab and Commerce Secretary Carlos Gutierrez are also expected to participate in the talks. |