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Obama presses China on currency in trade speech
An employee counts yuan banknotes next to U.S. dollar banknotes at a branch of Bank of China in Changzhi, Shanxi province, March 9, 2010.
Credit: Reuters/Stringer
WASHINGTON |
WASHINGTON (Reuters) - President Barack Obama pressed China on Thursday to move to a "more market-oriented exchange rate" in a speech where he laid out a plan to boost U.S. exports in the coming years.
"As I've said before, China moving to a more market-oriented exchange rate would make an essential contribution to that global rebalancing effort," Obama said in the text of a speech.
"We all need to rebalance. Countries with external deficits need to save and export more. Countries with external surpluses need to boost consumption and domestic demand," he said.
Obama's rare comment about the currency comes as his administration faces a decision over whether to label China a
"currency manipulator" in a semiannual Treasury Department report due on April 15.
Such a decision would risk harming U.S.-China relations, which have already become tense over Obama's meeting last month with the Tibetan spiritual leader, the Dalai Lama.
U.S. businesses say China's currency is undervalued and puts them at a big competitive disadvantage.
Obama, who has pledged to double U.S. exports over five years, said that goal was critical to create jobs.
"In a time when millions of Americans are out of work, boosting our exports is a short-term imperative," he said.
"When other markets are growing, and other nations are competing, we need to get even better. We need to secure our companies a level playing field," he said.
The president repeated his administration's intention to work on outstanding trade agreements, including the long-stalled global pact known as the Doha Round.
"We'll continue to work toward an ambitious and balanced Doha agreement - not just for the sake of any agreement, but for one that enhances market access for American agriculture, goods, and services," he said.
"We'll strengthen relations with key partners like South Korea, Panama, and Colombia, with the goal of moving forward with existing agreements in a way that upholds our values."
(Reporting by Jeff Mason, Caren Bohan and Steve Holland)
What leverage does Obama have to “press” China on anything? Obama will walk out naked when he plays strip poker diplomacy with the Chinese.
A Currency Manipulator?? C’mon, they’re pegged to the US$$$, how much more manipulative can you get?
China must roll on the floor laughing knowing that it owns the United States.
Once Obama gets his way and devalues the dollar against the yuan, his goal of devaluing the dollar against every major currency will be complete. What is remarkable, is that nobody seems to care. That’s your dollars, your wealth, your buying power, he has just wiped out.
Currency exchange rates have virtually nothing to do with trade deficits. Since the 1970s, the dollar has fallen by over 300% vs. the Japanese yen and yet, installing of falling, our trade deficit with Japan exploded.
Two years ago, China let the yuan rise by 20%. The result is that our trade deficit with China grew even worse.
Currency exchange rates tend to stabilize at a level where unemployment between two nations is equal, not at a point where a balance of trade is restored.
Badly overpopulated nations like China, Japan, Germany, Korea and others, desperate to gainfully employ badly bloated labor forces, will never let something so trivial as exchange rates erode their share of the U.S. market. They’ll find other ways to subsidize their manufacturers and maintain their surplus.
The only way for the U.S. to restore a balance of trade is by limiting imports from these nations, either with quotas or tariffs.
I am getting tired of all this Administration’s PR. China already said it was looking into it’s currency issues. But they have also printed a good chunk of money and allowed huge amounts of loans, so they are going to cause their currency to deflate now, thus bring it to where it is valued.
Further, President Obama says he is going to help US businesses export? By “forming committees” are you serious. Please vote this gentleman out of office, we need a president who has actually run a business and had to make a payroll. Give me a break, I am tired of this PR nonsense.
