China Derides ‘Meaningless’ Currency Debate with US

Posted December 28th, 2011 at 6:35 am (UTC-5)
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China's state news agency on Wednesday praised the U.S. Treasury for refusing to label Beijing as a currency manipulator, saying it is time to move beyond what it calls a “useless, meaningless” quarrel over the value of its yuan currency.

Although the U.S. Treasury on Tuesday said the yuan was significantly undervalued, it refused to designate China as a currency manipulator, which could lead to punitive action by U.S. lawmakers.

The official Xinhua news agency said in a commentary on Wednesday that the move was a “positive signal” that would help soothe markets and benefit trade.

U.S. officials have long accused China of artificially keeping the value of the yuan low in order to make its exports less expensive than similar products made in the United States.

U.S. President Barack Obama recently chided China for not allowing the yuan to reach a fair market level. At a November APEC meeting, he said that Chinese President Hu Jintao should act like a “grown-up” and adhere to internationally recognized trade standards.

In October, the U.S. Senate passed legislation threatening higher tariffs on Chinese goods if Beijing fails to ease controls that keep its currency undervalued, though the legislation is unlikely to become law.

Wednesday's Xinhua commentary said the issue has been “politicized over and over again in Washington,” and that it was time to “look to the broader picture” and find new areas for further bilateral trade cooperation.

It again defended the low value of the yuan, saying exchange rate reform will be carried out over a “gradual and long-term process.”

The currency imbalance helped send the U.S. trade deficit with China to a record level of more than $270 billion in 2010.