BEIJING -- Arguing that the RMB yuan's exchange rate is not the cause of China- U.S. trade imbalance, China expressed its strong oppositions hours after the U.S. Senate passed a controversial bill that would slap tariffs on Chinese goods for the so-called "currency manipulation", warning the U.S. politicians against politicizing the issue of China's currency and resorting to trade protectionism.
In a written statement posted on its website, China's Foreign Ministry urged rejection of the bill.
"This proposed bill in the name of so-called 'exchange rate misalignment' is protectionism and a serious violation of World Trade Organization rules," Ma Zhaoxu, a Foreign Ministry spokesperson, said in the statement. "This won't solve America's own economic and employment problems."
China's Vice Foreign Minister Cui Tiankai on Monday warned that the bill could trigger a trade war and hold back global economic recovery, and it might have an adverse impact on the development of the relations between the two countries.
"Should the proposed legislation become law, the only result would be a trade war between China and the US and that would be a lose-lose situation for both sides," Cui said.
China's Ministry of Commerce on Wednesday also voiced its adamant opposition to the bill. The move has seriously violated international regulations and sent a wrong signal of escalating trade protectionism, said Shen Danyang, spokesperson for the ministry.
Meanwhile, China's central bank issued a statement the same day defending the value of the country's currency.
"The American Senate has repeatedly ignored the facts, has constantly pestered China on the renminbi exchange issue in order to find an external excuse for its own malaise," the statement said.
The legislation, now largely targeted at China, would penalize any country "found to be holding the value of its currency down to create an unfair trade advantage".
Since China adopted a "managed float" of renminbi in 2005, the currency has appreciated in real terms by over 20 percent against the U.S. dollar.
Still, not a few politicians and economists in the U.S. say China is guilty of "currency manipulation" and say the RMB remains artificially undervalued.
The bill still needs to pass the House, where it faces stiff opposition from some Republican leaders wary of a trade war and harm to U.S. business interests in China. And the Obama administration has yet to demonstrate support of the legislation either. In the disguise of reducing trade imbalance between the two countries and creating more jobs at home, the U.S. government might find it a handy way to shift its own troubles upon others by designating China as a "currency manipulator".
But, if the U.S. stopped short of contemplating the issue and taking an objective and far-sighted view on the yuan exchange before making further decisions, especially at this critical juncture, the miscalculation would not only impair the U.S. interests but also disrupt the world's joint efforts to reboot the global economy and bode ill for the prospect of the economic recovery worldwide.
