Why is US suddenly silent on currency?

15:06, April 07, 2010      

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American protectionists cried “currency manipulation” on China and this attracted the attention of many other countries, which now anxiously await the United States’ next move. However, the United States has delayed publication of its report on the international economic and exchange rate policies of its major trading partners. It seems that the United States is trying to keep a low profile on this issue, so that all people across the world can take a load off their minds.

Why did the United States delay the report? First, the United States is playing the game in accordance with its established strategies. In fact, Timothy Geithner has already told us the answer by saying, "I believe these meetings are the best avenue for advancing U.S. interests at this time." Since there will be a series of very important meetings involving the United States, China, and other countries over the next three months, the United States cannot go too far and has to leave some room for maneuvering.

In addition, the United States maintains a low profile because its behaviors are morally indefensible. Some political factors such as a low approval rating for Barack Obama and high unemployment in the United States drove the country to ask for the appreciation of the RMB. However, it is unreasonable and unrealistic to force other countries to comply with its terms regardless of their own circumstances. Gangster logic cannot force any country to yield.

Furthermore, the American people also know that putting pressure on China cannot lead to the appreciation of the RMB, because any country's foreign and economic policies are inseparable from its domestic situation. If the United States puts pressure on the RMB, probably its slow appreciation cannot be implemented. China has raised the RMB exchange rate by 21 percent since 2005. It is China's contribution to the world and is a readjustment China made on the basis of its domestic situation.

It's up to China whether the RMB will appreciate or not. Even if China decides to appreciate the RMB in the future, it will only be done in a medium to long-term process. It's also the Chinese government's prerogative as to how the RMB will be gradually appreciated. This is the reason why the United States has delayed releasing the report.

We also found that when Geithner announced the report would be delayed, he spoke highly of China's handling of the financial crisis but would not say clearly if China would be listed as a currency manipulator. He just delayed to release the report. Therefore, the “sword of protectionism" is still hanging over the Chinese and the American people's heads, so we should not take this lightly.

By People's Daily Online


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