Another voice heard from … China’s economic distortion by currency manipulation is making a farce of the “level playing field”
China and some other Asian nations continue to keep the dollar artificially high so they can keep their exports to us far higher than they would be without such anti-market manipulations,â€� Vargo explained.
â€œAfter adjusting for relevant price changes,â€� Vargo continued, â€œthe volume of Canadian and Mexican imports was up just 4 percent in February over the previous 12 months, and the volume of E.U. imports was up less than 2 percent.
â€œBy contrast, Chinaâ€™s imports have increased by 51 percent during the same timeframe and have accounted for a whopping 44 percent of growth in overall goods imports to the U.S.,â€� Vargo noted.
â€œItâ€™s most unfortunate that the dollarâ€™s correction has been shouldered only by those economies that donâ€™t artificially manage their currencies for export promotion. To correct this problem, the Administration, other governments and international institutions must work harder to persuade countries such as China to let their currencies be valued by market forces. The current situation hurts countries playing by the rules and dangerously fans neo-protectionist embers,â€� concluded Vargo.
Campaigning against China’s currency manipulation has been going on for some time, see:
SENATORS ANNOUNCE BIPARTISAN EFFORT TO FORCE CHINA TO STOP CURRENCY MANIPULATION September 9, 2003
New Bipartisan Congressional Coalition Urges President to Increase Pressure on China to Float its Currency July 31, 2003
Here’s something a little more recent ..
WalMart, The Coming War With China, & Currency Manipulation
I am not particularly tolerant of protectionism, but China’s manipulation of exchange rates is playing a major part in creating very serious problems.
Yes, I know that much of the anti-WalMart fever is labor union efforts to beat up on one of the big union busters, but part of why WalMart is so big is that it is largely Red China’s salesclerk. China’s fixed exchange rate–when most other nations having floating exchange rates–is part of the problem.
Then there’s this group, of which we are indirect members via our membership in the PMA
The China Currency Coalition is an alliance of industry, agriculture, and worker organizations whose mission is to support U.S. manufacturing by seeking an end to Chinese currency manipulation.
An interesting article, Currency Manipulation and Free Trade from Steelnet.org
Global commerce offers the United States significant opportunities to improve productivity and raise living standards. However, Chinese intervention in currency markets to maintain an artificially undervalued yuan is denying Americans many of the benefits of freer trade.
Exchange rates are prices, and the value of a nationâ€™s currency is the most fundamental price in a globalized economy. Without assurances that other governments will not resort to manipulating exchange rates to advantage their producers, the gains from trade can be wiped out.
That is exactly what is happening to the United States.