Adam Chen and Woods Lee in Beijing 24 January 2009
The accusation by the United States Treasury secretary-designate that the mainland is “manipulating” its currency brought a muted response from Beijing, but the nation’s internet chat rooms bristled with outrage.
“This is American’s old and foul habit - they always wag their fingers at others and find some excuse for their own lapses and foolishness,” said an internet user from Guangdong on a chat room at sohu.com.
“Just stop talking with the US. We should do whatever is beneficial for our own interests,” said another net user in Beijing, who feared renewed protectionist measures from the US.
The strong reaction stemmed from a statement Thursday by Timothy Geithner, President Barack Obama’s choice for Treasury secretary. He said the mainland was “manipulating” its currency, a term the Bush administration had deliberately avoided for years to describe Beijing’s foreign exchange practices.
Mr. Geithner added that Washington would “aggressively” use all its diplomatic tools to press Beijing to move faster on currency reform.
Officially, Beijing’s reaction to Mr. Geithner’s comments was mild.
“The debates will eventually sink without a trace,” said Ding Yifan, the deputy head of the Research Institute for World Economy at the State Council’s Development Research Centre.
He added that the “American Chamber of Commerce will stop making the accusations because the damage caused by the yuan’s appreciation will first damage the interests of US companies in China.”
Nevertheless, sources said the central government was trying to determine if the US was sending up a trial balloon on taking a stronger stance on yuan appreciation and whether the issue would prompt renewed calls for protectionist measures.
The US has not formally labelled China as a currency manipulator. Under US law, doing so would require the Treasury Department to begin “expedited” negotiations with Beijing - either bilaterally or through the International Monetary Fund - to reduce China’s huge trade surplus with the US and eliminate any “unfair” currency advantage.
The step could also give a green light to members of Congress to draft legislation making it tougher for Chinese goods to enter the United States.
However, Mr. Ding appeared to downplay the issue. He said discussions between the US and the mainland about the value of the yuan would continue because the US believed it had to do so for its own political reasons.
A spokesman for the People’s Bank of China, which determines the yuan’s value, said the bank had noted the comments by Mr. Geithner, and any response would be published immediately on its website.
The US trade deficit shrank 28.7 per cent in November, the biggest contraction in 12 years, as weak consumer demand and plummeting oil prices caused a record drop in imports, the US Commerce Department said last month.
The yuan edged down to 6.8380 against the dollar yesterday.
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Geithner claim over yuan seen as just rhetoric
State economist plays down remarks
Adam Chen and Woods Lee in Beijing
24 January 2009
The accusation by the United States Treasury secretary-designate that the mainland is “manipulating” its currency brought a muted response from Beijing, but the nation’s internet chat rooms bristled with outrage.
“This is American’s old and foul habit - they always wag their fingers at others and find some excuse for their own lapses and foolishness,” said an internet user from Guangdong on a chat room at sohu.com.
“Just stop talking with the US. We should do whatever is beneficial for our own interests,” said another net user in Beijing, who feared renewed protectionist measures from the US.
The strong reaction stemmed from a statement Thursday by Timothy Geithner, President Barack Obama’s choice for Treasury secretary. He said the mainland was “manipulating” its currency, a term the Bush administration had deliberately avoided for years to describe Beijing’s foreign exchange practices.
Mr. Geithner added that Washington would “aggressively” use all its diplomatic tools to press Beijing to move faster on currency reform.
Officially, Beijing’s reaction to Mr. Geithner’s comments was mild.
“The debates will eventually sink without a trace,” said Ding Yifan, the deputy head of the Research Institute for World Economy at the State Council’s Development Research Centre.
He added that the “American Chamber of Commerce will stop making the accusations because the damage caused by the yuan’s appreciation will first damage the interests of US companies in China.”
Nevertheless, sources said the central government was trying to determine if the US was sending up a trial balloon on taking a stronger stance on yuan appreciation and whether the issue would prompt renewed calls for protectionist measures.
The US has not formally labelled China as a currency manipulator. Under US law, doing so would require the Treasury Department to begin “expedited” negotiations with Beijing - either bilaterally or through the International Monetary Fund - to reduce China’s huge trade surplus with the US and eliminate any “unfair” currency advantage.
The step could also give a green light to members of Congress to draft legislation making it tougher for Chinese goods to enter the United States.
However, Mr. Ding appeared to downplay the issue. He said discussions between the US and the mainland about the value of the yuan would continue because the US believed it had to do so for its own political reasons.
A spokesman for the People’s Bank of China, which determines the yuan’s value, said the bank had noted the comments by Mr. Geithner, and any response would be published immediately on its website.
The US trade deficit shrank 28.7 per cent in November, the biggest contraction in 12 years, as weak consumer demand and plummeting oil prices caused a record drop in imports, the US Commerce Department said last month.
The yuan edged down to 6.8380 against the dollar yesterday.
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