Two US senators who have proposed trade sanctions against China for its
currency system said they were optimistic Beijing will implement reforms,
but said sanctions remained a possibility.
US Senators Chuck
Schumer, D-NY, (L) and Lindsey Graham, R-SC, seen here at a press
conference 15 March 2006. The two US senators, who have proposed
trade sanctions against China for its currency system said on a trip
to China, they were optimistic Beijing will implement reforms,
but said sanctions remained a possibility.
[AFP] |
"We believe the Chinese government and people see it in their interest to let
the yuan float. So we're feeling better," said Democrat Chuck Schumer.
But asked whether he and his Republican colleague Lindsey Graham will still
call a vote in Congress by their target date of March 31 on legislation that
would raise tariffs on Chinese imports, Schumer said: "The jury is still out."
"We still need some concrete signs of movement," he told reporters.
The senators are on a fact-finding mission after co-sponsoring a bill that
would impose tariffs of 27.5 percent on Chinese imports unless China took steps
to strengthen its currency.
The senators and other US critics have argued that the yuan is undervalued by
as much as 40 percent against the dollar, making US companies uncompetitive
against Chinese rivals, and helping drive up China's trade surplus with the
United States to a record 202 billion dollars last year.
The senators said their trip has helped them gain a better understanding of
China, including the unemployment pressures it faces, but nonetheless they are
more convinced that the yuan needs to rise in value for the good of China as
well as the US.
"I'm more committed to the idea that three percent is not the final answer,"
Graham said, referring to the amount the yuan has risen against the US dollar
since July when China revalued it and ended its peg to the dollar, linking it to
a basket of currencies instead.
The senators said they now believe the Chinese government has the goal of
having its currency float, and were encouraged that Beijing wants to change the
structure of China's economic growth by encouraging greater consumption and
reducing people's high savings rate.
But they said, without elaborating, that they wanted to see more concrete
commitments from China within the next week before the deadline.
"We're not going to say it has to be this amount at this point in time. We
have to be convinced that it's real, it's concrete and there's an exit route in
terms of letting it float," Schumer said.
Meanwhile, the People's Bank of China said the new regime introduced last
year governing the yuan's daily moves was working smoothly and that the exchange
rate would be kept "basically stable at a reasonable and balanced level".
"We will further improve the yuan exchange rate formation mechanism and
develop the foreign exchange market to increase the floating flexibility of the
yuan exchange rate," the central bank said on its website.