Bush Administration: China Not a Currency Manipulator

I am not an authority on this issue. But isn't it widely understood that China does manipulate its currency? I find this kind of surprising.

From the Yahoo Business website...
Link to AP news article on Yahoo website

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By MARTIN CRUTSINGER, AP Economics Writer 1 hour, 47 minutes ago

WASHINGTON - The Bush administration on Wednesday announced it would not brand China as a country that was manipulating its currency to gain unfair trade advantages.
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The decision came in spite of growing pressure in Congress to take punitive action to deal with a U.S. trade deficit with China that hit a record $202 billion last year.

Treasury Secretary
John Snow did say he was "extremely dissatisfied" with the pace of China's currency reforms.

American manufacturers contend that China has been artificially keeping its currency devalued by as much as 40 percent against the dollar, giving Chinese manufacturers a huge competitive advantage against U.S. products.

However, the administration said in the latest currency report to Congress that it did not believe China technically met the definition in the law of a currency manipulator.

Critics of China's trade policies were quick to attack the decision.

"By failing to designate China as a manipulator in this report ... the United States comes off as a paper tiger unwilling to stand up for its domestic industrial sector," said Auggie Tantillo, executive director of the American Manufacturing Trade Action Coalition, which represents U.S. textile and clothing companies.

"Secretary Snow has been consistently rolled by the Chinese government in his years-long but unsuccessful effort to get China to take action on its highly undervalued currency," said Kevin Kearns, president of the U.S. Business and Industry Council, which represents many medium and small-sized manufacturing companies.

The report noted that China last July announced it was abandoning a fixed link of the yuan's value to the dollar, although since that time the yuan has risen in value by only about 3 percent.

"We are extremely dissatisfied with the slow and disappointing pace of reform of the Chinese exchange rate regime," Snow said.

"We are not satisfied with the progress made on China's exchange rate regime and we will monitor closely China's progress every step of the way," he said.

The currency report, which the administration must present to Congress every six months, was delayed by a few weeks, until after Chinese President
Hu Jintao and
President Bush discussed the currency dispute during a White House meeting on April 20.

The administration had hoped that Hu would signal China would move faster to allow its currency to rise in value against the dollar, but no such announcement came out of the half-day summit.

A designation as a currency manipulator would trigger consultations between the two nations and could lead to trade sanctions if the United States won a case on the issue before the
World Trade Organization.

The administration contends it can make more progress by lobbying China to make changes than by bringing a WTO case. It has been raising the issue with more intensity over the past three years.

An effort to impose more punitive sanctions has gained wide support in Congress. A bill sponsored by Sens. Charles Schumer, D-N.Y., and Lindsey Graham, R-S.C., would impose 27.5 percent punitive tariffs on all Chinese imports coming into the United States unless China moved more quickly to allow the yuan to rise in value against the dollar.

The Chinese Communists are terrified of inflation. Inflation was how the KMT lost power. Some have suspected that the Chinese and US inflated the ruble to help bring down the USSR. So they are not really hip with an upward adjustment.

So the Chinese will sorta maintain the "peg" on the dollar. That tarrif will never ever pass, too many American Corporations have investments in China. End of discussion.


I think the ugly truth is starting to show; the Chinese government says to its people, "Let's grow rich together" and proves it by extending loans to business, building dams and nuclear power plants, educating technical people and encouraging people to save money and grow rich.


The US government says to its people, "Let's all end up being equals" and proves it with special entitlements, obstructing new energy plants and educating people from childhood in how to be sensitive and "fair". We're discouraged to save money by a Fed which is inflating dollars at a breakneck pace. We're discouraged to be rich by being punished for it with extra taxes.

We should let people reward their hard work by letting them keep the fruits of their labor, not be rewarding sloth and dissolute living with subsidies. Used to be, being poor was shameful. Now you're a victim, with entitlements.

If the average American got a quarter an hour and the average Chinese got ten dollars an hour I'm still not sure we'd have an advantage. It's very hard to compete against people who have their government pulling for them, while our government holds us down.

Punishing Chinese thrift and common sense won't help us, no more than punishing hard work inside of America helps us. This is just the same crybaby non-sense we pulled with the Japanese in the 1980s and 1990s. It'll end up the same way.

Gene

How did outside countries inflate the ruble?

If someone can tell me how revaluing the Chinese currency would help at this point, I'd like to know it. When, for instance, every pair of work boots I shop for comes from China, it's too late to help American boot factories. This is true of many industries. What industries will it help? Instead of being 1/3 the price of American for Chinese, it would then be 1/2 the price? I think it's too late to do any good by reestablishing exchange rates.

Please tell me why I'm not seeing this logic.

Richard

The yuan is tightly controlled by Beijing, and each trading day the yuan is allowed a .3% band on either side of the previous days state set closing price . How can that NOT be manipulating? The yuan doesn't trade in world markets and Beijing restricts the buying and selling on it's only official Chinese exchange. A $1 trillion a year economy and trades in Shanghai average just under $1 billion.

As the yuan value increases, import prices increase, decreasing demand for Chinese goods raw or finished. A cheaper dollar would boost demand for US exports, BUT to prevent ensuing inflation woes from a weaker dollar, the overspending government would have to tighten it's own belt, and we've all seen that ain't gonna happen. The gov PROMISED to do it in 1985.

The National debt has increased at $1.95 billion per day since Sept 30, 1995. If it's due primarily to the WTC attacks as most seem to think, then round one goes to Bin Laden (where is that guy?).
Just a Quick $9 Trillion......Honest, It's the Last Time

Congress Sets New Federal Debt Limit ... $9 Trillion

Trade Deficit Ticker - Real Time

I am not an economist(BORING but important). But if you always spend and then run out of money, you can't get credit to pay your bills. So you print more money depressing the value further. Now couple all this with the recent hike in Fed interest rates, and you can begin to see how they attempt to control inflation. Smoke and mirrors!

On top of this "gomm" now they pass tax cuts that won't help anybody I know, just to stimulate the economy (they say). The GOP is terrified of losing the House (and their jobs) and that's a desparate last stand that I hope people can see through. Ain't nothing to stop 'em from raising them again. They've raised everything else except wages.

THEN there's the Gulf Coast rebuild (forget New Orleans for a moment). They planned on using taxes for that. How they paying for bond issues?SOoo, how's that working?

It's hard to assimilate it all; but when you try to think about it all together, don't you get a sinking feeling in the pit of your stomach, without knowing exactly why?
Dobber

Richard Rogers wrote
>When, for instance, every pair of work boots I shop for comes from China, it's too late to help American boot factories.

Made in USA (WI, I believe)
http://www.duluthtrading.com/store/mens/mens_footwear/boots/85380.aspx

Made in USA (WI, I believe)
http://www.duluthtrading.com/store/mens/mens_footwear/boots/97786.aspx

Don't forget about:
http://www.redwingshoe.com/work/workboots.aspx

Next pair of boots I buy will be from one of these companies. Redwing doesn't list origin on their website, but a lot of the good shoes are still made in MN.

I'm just about at the end-of-life for the pair of steeltoe boots I bought at Sears in 1988.

Pete

can anyone tell me why gold made it up to 720 / oz today, and silver is at 14.75? Sorry, just checked again, gold is down 3 dollars and silver is down .07 to 14.87...either way, when you consider that silver was at 4.00 an oz in 2003 (and 11.50 a month ago), it's quite the jump.

Ths morning June Gold was over 727
A little lower now at 716

Golds value is a combination of the US$ loosing value and the value of Gold going up on the world market. Combine the two and Gold looks like a rocket.

Silver goes along for the ride.

Here's one to check out about the gold and it's effects on the dollar. It was predicted early last year gold prices would soar to over $800/oz.
The End of the Dollar Hegemony - by Ron Paul of Texas

Dobber

The End of the Dollar Hegemony - by Ron Paul of Texas

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Intresting and eye opening reading Dirt Dobbler.
I was familiar with a lot of the stuff he mentioned.

Our propaganda wagon (the main press network) is already trying to legitamize attacking Iran. Its deja-vu all over again.

Can't remmember the last time I looked to the 4 major networks for news. I stick to reuters and bbc mostly.
I lived in England (2.5 years)and the Middle East (16.5 years-Family was Expats-Dad was engineer in an Oil Refinery).Amazing what goes on in the world that American mass media never mention.

I am surprised that ordinary Americans don't raise a stink about the Federal Reserve being privately owned. Or maybee the stink raising is relegated to fringe groups?

Ordinary Americans think the Fed is Federal and has reserves.

Who tells them otherwize? Greenspan or now gentle Ben?

Thanks for the links to the boots. My feet have been killing me for a while. Time for new ones. Prone to varicose veins in my legs (thanks, Grandpa Rogers, for those genes!) and the cement I'm on all day is tough!

I think I found the Red Wings were Chinese now, but I'm not 100 percent sure of that. It was disgusting. Dod Marten's boots used to be from UK, but now I see Chinese origin on those too.

No one has answered yet how the revaluation would truly help. I hate to say it, but it would probably be inflationary for American buyers, and that's about it. Of course, I could be wrong, but I would like to know why.

Topic: Bush Administration: China Not a Currency Manipulator

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So, you find the Bush Administration's finding strange? Well, if Bush and his cronies had to wear outfits with their "sponsors" logos on them, they'd look like a NASCAR driver and pit crew!

Thanks again

Richard

The red wings at tractor supply are chinese

if Bush and his cronies had to wear outfits with their "sponsors" logos on them, they'd look like a NASCAR driver and pit crew!

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Now that's funny I have this mental picture of a patchwork quilt.....

For work boots try Mason Shoes . Most comfortable on concrete I've ever worn, though I did not use steel toes. 90% made in the USA in Chippewa Falls, WI. Toll free 1-800-826-7030

How did outside countries inflate the ruble?

The story I read was that US and China collaborated to pump rubles into the Soviet economy.

Russia was a "cash" society for the most part. No credit cards, no major bank loans. Indeed, there was a compulsory "loan" removed from your paycheck and given to the goverment.

The post Soviet Russian government didn't help matters by inflating the ruble to make up for tax shortfalls, to the tune of 25 TRILLION Rubles. They needed the money to pay for public employees.

Then the Russian Government issued a "new" Ruble. After a certain date anyone with the old notes couldn't redeem them. Many Russians lost huge amounts of money because the banks would only redeem so many of their saved up currency. Whether this was done to help curb inflation or deal with this alleged counterfieting plan, I do not know.

It is well known that the US dollar is being counterfieted. North Korea and Iran are both producing copies of US $100 dollar bills. Fortunately we only hold a small amount of our wealth in currency, so we're not being hammered too hard by this non-sense.

Gene

Well, if Bush and his cronies had to wear outfits with their "sponsors" logos on them, they'd look like a NASCAR driver and pit crew!

Try, if you can Richard, to name me ONE US President who did not have Corporate sponsors.

Free hint: Since 1900 most US Presidents were backed, at least in part, by large banking interests. Alternately, not a few were allegedly backed by Organized Crime. One of the most famous of the latter had a father who helped crash the US Stock Market in 1929, and who later won the election in part with the help of certain famous folk who rigged his results in Chicago. He is most famous for being murdered while in office under suspicious circumstances.

Gene

And the son (grandson?) of the chief Chicago rigger tried to rig Florida in 2000... Charles

I am the one, Orgasmatron, the outstretched grasping hand
My image is of agony, my servants rape the land
Obsequious and arrogant, clandestine and vain
Two thousand years of misery, of torture in my name
Hypocrisy made paramount, paranoia the law
My name is called religion, sadistic, sacred whore.
I twist the truth, I rule the world, my crown is called deceit
I am the emperor of lies, you grovel at my feet
I rob you and I slaughter you, your downfall is my gain
And still you play the sycophant and revel in you pain
And all my promises are lies, all my love is hate
I am the politician, and I decide your fate
I march before a martyred world, an army for the fight
I speak of great heroic days, of victory and might
I hold a banner drenched in blood, I urge you to be brave
I lead you to your destiny, I lead you to your grave
Your bones will build my palaces, your eyes will stud my crown
For I am Mars, the god of war, and I will cut you down.

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That's the lyrics to "Orgasmatron" by Motorhead

Not hard to project it over the Bush Administration, huh?

Richard