“If this measure passes, it will have a big impact on global trade,” said Ding Zhijie, director of the finance school at Beijing’s University of International Business and Economics. “The United States can label you according to its own standards and impose anti-subsidy remedies.”
Beijing might face more pressure at a Nov. 11 meeting with the United States and other Group of 20 major economies in Seoul. The friction is likely to get rougher if many major economies remain anemic, as projected.
Brazil’s finance minister said this week that some countries are trying to boost growth by weakening exchange rates and controlling capital flows. He warned that might lead to a “global currency war.”
“As the global recovery slows, countries with large current account surpluses will likely come under pressure from countries with large fiscal deficits and high unemployment rates,” Goldman Sachs economists said Thursday in a report.
The China currency debate has split the U.S. business community. Exporters say they are hurt by underpriced Chinese goods, but companies that operate in or export from China worry that they might suffer from U.S. sanctions or Chinese retaliation.
The American Chamber of Commerce in China, which represents 1,200 companies, appealed to the Senate on Thursday to kill the currency bill. The group said it was unlikely to produce significant U.S. job growth and might harm American exporters.
“Blaming China won’t help the U.S. economy, but this legislation may cost American jobs,” said Chamber Chairman John D. Watkins Jr. “We call on the U.S. Senate to thoroughly review the proposed legislation, and we hope it does not move forward in the legislative process.”
“They do not want a trade war because they are beneficiaries of the trade surplus,” he said. “For China, it’s crucial to placate the U.S. critics. But they cannot placate them the way those critics want to be placated, meaning by allowing a strong appreciation, because this would be too harmful for their exports and growth.”
'Your papers, please' must never be heard in America
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