March 11, 2010
Obama's China Currency Comment
Headline writers this afternoon say President Obama "urged" China to stop controlling its currency. What did Obama say exactly? Long into a banal booster speech at the annual meeting of the Export-Import Bank of the United States (a federal government agency), Obama said
"China moving to a more market-oriented exchange rate will make an essential contribution to that global rebalancing effort."
It surprises me Obama continues to spend political capital in a pointless pursuit to coerce Beijing to appreciate its currency. Washington can urge China all it wants but Beijing has made its position on Renminbi very clear. Just this week at the National People's Congress session China said the Yuan's unofficial peg to the US dollar will end and appreciation up to 10% over the short to medium term is expected.
A move by Beijing to drastically create a more "market-oriented" exchange rate would mean reducing China's dollar holdings in favor of other currencies or gold. Is this ultimately what Washington really wants? It is also hard to argue that the exchange rate of the Yuan is that out of whack for US exporters when China is year after year the fastest growing market for US exports.
A move by Beijing to drastically create a more "market-oriented" exchange rate would mean reducing China's dollar holdings in favor of other currencies or gold. Is this ultimately what Washington really wants? It is also hard to argue that the exchange rate of the Yuan is that out of whack for US exporters when China is year after year the fastest growing market for US exports.
A far better use of rhetoric and effort would be for Obama to push Beijing to fulfill its promise to enter into the WTO Government Procurement Agreement (GPA) and open up potentially billion$ in opportunities to American businesses. So far no moves on the GPA have been made by US Trade Rep Ron Kirk or anyone else in the Obama administration. Why not?....
Labels: currencies, exports, foreign exhange, forex, goverment procurement, obama, wto, yuan
# posted by Sinomania! : 3/11/2010 01:35:00 PM
Comments:
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when will the almighty dollar and the chineese yuan ratio make a huge change?
in what direction?
what dollar/yuan exchange rate would the proud mao want?
where is the sinomania expertise on this financial tsunami prediction?
i need to know cause i plan to buy an historic home in a remote town of china and retire.
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in what direction?
what dollar/yuan exchange rate would the proud mao want?
where is the sinomania expertise on this financial tsunami prediction?
i need to know cause i plan to buy an historic home in a remote town of china and retire.
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