Business and Finance Career - China’s reluctance to allow the value of its currency to rise “is a real concern” to both the United States and to China’s other major trading partners and could be subject to negotiations in coming weeks, the American ambassador to China said on Thursday.
At the same time, a Chinese trade official offered a first hint of flexibility on the issue, saying his organization was polling more than a thousand Chinese manufacturers on how a change in exchange rates would affect their business.
In a speech to students at Beijing’s Tsinghua University, the ambassador, Jon Huntsman, said that economic problems in the United States had increased pressure there for a change in the value of the renminbi, which China currently ties to the value of the dollar. That has kept Chinese exports comparatively cheap and, critics say, hampered other nations’ recovery from the global recession.
“My Chinese friends like to pitch this as just an American issue. I like to say that there are many countries that feel the same way,” Mr. Huntsman said. But he focused on the growing political backlash from Americans who feel the currency policy is hurting them.
“This is a real concern to people in my country. Unemployment is almost 10 percent. It’s a difficult economic period,” he said. “I’d be misleading you if I left you with the impression that this wasn’t a very, very important issue in the United States, and will continue to be.”
The Treasury Department is under growing pressure to brand China a currency manipulator in a report to be issued next month. That could open the door to retaliatory measures that could increase the cost of Chinese imports and raise the risk of a trade war between the two nations.
In a question-and-answer session after his speech, Mr. Huntsman said citizens of both nations should listen to both sides of the dispute, then “allow negotiators to find a pathway forward.” China’s foreign ministry spokesman, Qin Gang, echoed that at a Thursday briefing, saying that the American demands were not fair, but that the dispute “requires that both sides be calm and rational.”
Separately, the China Council for the Promotion of International Trade disclosed Thursday that is surveying experts in 12 export-related industries to determine how badly they would be affected by a rise in the renminbi’s value.
The quasi-government group’s vice chairman, Zhang Wei, predicted that labor-intensive industries such as garment and furniture makers would be hard hit by more valuable renminbi.
“Their profit margin is already very narrow,” Reuters quoted Mr. Zhang as saying. “So for these companies, the consequences would be disastrous.”
In his speech at Tsinghua, one of China’s elite universities, Mr. Huntsman said he anticipated that recent disruptions in United States-China relations would be rapidly overcome. Besides American displeasure over the renminbi, China reacted sharply this year to the United States’ decision to sell arms to Taiwan and President Obama’s recent meeting with the Dalai Lama, the Tibetan religious leader.
“To put our relationship on a more stable and secure footing, we have to de-link our differences on bilateral issues from our cooperation on global issues,” he said.
Mr. Huntsman urged China to “take immediate action” to force Iran to comply with international inspections of its nuclear program, and said he hopes the two nations can agree this year on verifiable targets to reduce emissions of greenhouse gases.
At the same time, a Chinese trade official offered a first hint of flexibility on the issue, saying his organization was polling more than a thousand Chinese manufacturers on how a change in exchange rates would affect their business.
In a speech to students at Beijing’s Tsinghua University, the ambassador, Jon Huntsman, said that economic problems in the United States had increased pressure there for a change in the value of the renminbi, which China currently ties to the value of the dollar. That has kept Chinese exports comparatively cheap and, critics say, hampered other nations’ recovery from the global recession.
“My Chinese friends like to pitch this as just an American issue. I like to say that there are many countries that feel the same way,” Mr. Huntsman said. But he focused on the growing political backlash from Americans who feel the currency policy is hurting them.
“This is a real concern to people in my country. Unemployment is almost 10 percent. It’s a difficult economic period,” he said. “I’d be misleading you if I left you with the impression that this wasn’t a very, very important issue in the United States, and will continue to be.”
The Treasury Department is under growing pressure to brand China a currency manipulator in a report to be issued next month. That could open the door to retaliatory measures that could increase the cost of Chinese imports and raise the risk of a trade war between the two nations.
In a question-and-answer session after his speech, Mr. Huntsman said citizens of both nations should listen to both sides of the dispute, then “allow negotiators to find a pathway forward.” China’s foreign ministry spokesman, Qin Gang, echoed that at a Thursday briefing, saying that the American demands were not fair, but that the dispute “requires that both sides be calm and rational.”
Separately, the China Council for the Promotion of International Trade disclosed Thursday that is surveying experts in 12 export-related industries to determine how badly they would be affected by a rise in the renminbi’s value.
The quasi-government group’s vice chairman, Zhang Wei, predicted that labor-intensive industries such as garment and furniture makers would be hard hit by more valuable renminbi.
“Their profit margin is already very narrow,” Reuters quoted Mr. Zhang as saying. “So for these companies, the consequences would be disastrous.”
In his speech at Tsinghua, one of China’s elite universities, Mr. Huntsman said he anticipated that recent disruptions in United States-China relations would be rapidly overcome. Besides American displeasure over the renminbi, China reacted sharply this year to the United States’ decision to sell arms to Taiwan and President Obama’s recent meeting with the Dalai Lama, the Tibetan religious leader.
“To put our relationship on a more stable and secure footing, we have to de-link our differences on bilateral issues from our cooperation on global issues,” he said.
Mr. Huntsman urged China to “take immediate action” to force Iran to comply with international inspections of its nuclear program, and said he hopes the two nations can agree this year on verifiable targets to reduce emissions of greenhouse gases.
