- The Washington Times - Tuesday, November 27, 2012

On an issue that dogged President Obama during his re-election campaign, the Treasury Department said Tuesday that China’s currency remains undervalued, but the administration stopped short of branding the country a currency manipulator.

In its semi-annual report to Congress on international exchange rates, Treasury said Chinese officials “have substantially reduced the level of official intervention in exchange markets” since last year, and have “taken a series of steps to liberalize controls on capital movements.”

Critics, including former Republican presidential candidate Mitt Romney, blame China for keeping the value of its currency artificially low to help its competitiveness in trade, making its goods cheaper in overseas markets and costing American jobs. Mr. Romney said he would, if elected, brand China a currency manipulator, a step toward possible trade sanctions.

An ally of the president, Sen. Robert P. Casey Jr., Pennsylvania Democrat, blamed the administration Tuesday for not getting tough with China.

“Today’s currency report by the Treasury Department makes it clear that China is still cheating on its currency and stealing American jobs,” Mr. Casey said in a statement. “However, once again, the administration failed to act.”

He said the news that China is “playing games with its currency” is no surprise.

“But it should serve as a call to the administration to finally label China a currency manipulator,” Mr. Casey said. “Labeling China a currency manipulator will allow Pennsylvania workers and businesses to compete on a level playing field. When China cheats on its currency, Pennsylvanians lose their jobs — it’s that simple.”

Sen. Charles E. Schumer, New York Democrat and a longtime critic of China’s currency practices, also blasted the administration.

“This report all but admits China’s currency is being manipulated, but stops short of saying so explicitly,” Mr. Schumer said in a statement. “The formal designation matters because there can be no penalties without it. It’s time for the Obama administration to rip off the Band-Aid, and force China to play by the same rules as all other countries.”

Treasury said the yuan, China’s currency, has appreciated by 12.6 percent against the dollar when adjusted for inflation since June 2010. But the agency said the yuan “remains significantly undervalued, and further appreciation … against the dollar and other major currencies is warranted.”

Leading U.S. businesses doing business in China hailed the administration’s decision.

“The Treasury Department once again made the right call,” said John Frisbie, president of the U.S.-China Business Council, a group that represents U.S. businesses.

“Labeling China a currency ‘manipulator’ would do little to help us reach the goal of a fully convertible currency and market-driven exchange rate for China,” and could have backfired by prompting China to reverse improvements it already has made, he said.

China’s exchange rate has strengthened over 30 percent against the U.S. dollar over the past several years,” he said. “We need to move on to more important issues with China, such as removing market access barriers and improving intellectual property protection.”

Patrice Hill contributed to this report.


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