NAM Statement Concerning Treasury And China's Currency
WASHINGTON, D.C. – In response to today’s decision by the Treasury Department in its semi-annual report to Congress not to initiate bilateral or International Monetary Fund (IMF) negotiations on China’s currency, National Association of Manufacturers (NAM) Vice President for International Economic Affairs Frank Vargo issued the following statement:
The NAM has long pressed for China to allow the yuan to appreciate and to move toward a market-determined currency, and for the U.S. Treasury to initiate negotiations in the IMF or bilaterally to seek currency adjustment in accordance with the provisions of the Trade Act of 1988. This would be a move consistent with the articles of the International Monetary Fund (IMF), of which China is a member. Initiating such negotiations would allow the process of engagement with China to move forward and address this issue within the context of global rules.
In April of this year, Treasury’s currency report stated that “Treasury remains of the view that China’s yuan is undervalued.” There has been no further movement of the yuan against the dollar since that time. China continues to add to its already massive foreign currency reserves, already over $2 trillion.
We recognize the global financial and economic situation is still unsettled, but today’s report was a missed opportunity to provide the basis for moving ahead to address China’s currency within international institutions and in accordance with the G-20’s call for global rebalancing. We noted, however, the Treasury’s statement that the United States will work with China within the G-20 and the Strategic and Economic Dialogue to pursue policies permitting greater flexibility of China’s exchange rate and more balanced trade. We strongly encourage this course of action.