Search

Focuses on the U.S. President George W. Bush administration's reaction to China's foreign exchange policies. Efforts of the U.S. to urge China to relax its fixed exchange rate to the dollar; Possibility that the administration will anger China if it accuses it of manipulating its exchange rate to gain unfair trade advantage over the U.S.; Call by Congress for restrictions on Chinese imports; Skepticism of legislators about trade-opening deals in general; Pressure on Treasury Secretary John W. Snow to declare that China has been deliberately undervaluing its currency, the yuan, to keep Chinese exports cheap and build its huge trade surplus with the U.S.; Dilemma of the Bush administration if it gives China a clean bill of health; Implications if China relaxed its policy of pegging the yuan to the dollar; Outlook.

AMONG the many points of tension between the United States and China, perhaps the single greatest one concerns exchange rates. For more than a decade, Beijing has kept the value of the renminbi, also known as the yuan, more or less constant to the dollar, a strategy that critics say increases the price of American exports to China and fuels the rapidly growing trade deficit with Beijing. Despite its decision to let the yuan rise 21 percent against the dollar between 2005 and 2008, China has remained a favorite target of Congress. Democrats and Republicans have consistently called for punitive action against China, including sanctions on imports, unless it completely de-links the two currencies. [ABSTRACT FROM AUTHOR]

Reports on the defense given by President George W. Bush administration on the exchange rate of China in the U.S. Complaints of manufacturers and members of the Congress about the exchange rate; Impact of the undervalued currency on the trade deficit of the country; Request to change the value of the yuan.