The US Senate passed a currency bill that would punish countries that subsidize their exports by maintaining an artificially low exchange rate. China called such a law a 'lose-lose' for both sides.
The bill, passed Tuesday evening, “will not solve US economic and employment problems and will only disturb … efforts to promote world economic recovery,” said Chinese Foreign Ministry spokesman Ma Zhaoxu in a statement.
Reflecting growing anger in the US about the loss of jobs to China, the Senate passed a bill that would punish countries that subsidize their exports by maintaining an artificially low exchange rate. Washington has long been pressing Beijing to let its currency rise, making US goods cheaper in China and thus helping US exports.
Administration officials say they support the bill’s goals, but worry that it might violate US obligations under World Trade Organization rules. The bill is not expected to pass the House of Representatives, where Speaker John Boehner has called the legislation “dangerous.”
In a research paper published Wednesday, the Chinese Central Bank insisted that the Chinese currency, the yuan, “is gradually approaching a reasonable and balanced level.” In a managed process, the bank has strengthened the yuan by 30 percent since 2005, but this has not prevented the US trade deficit with China from widening.