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China's stand to undermine currency to boost exports 'not acceptable': Clinton


October 15, 2011 - Washington

US Secretary of State Hillary Clinton has that Washington should not continue to allow itself to be taken advantage of by China, which the West thinks undervalues its currency to boost exports around the globe.

"They continue to try to game the system to their advantage and our disadvantage. It is fitting and timely for us to be standing up and saying, 'this is not acceptable'," The Courier Mail quoted her, as saying.

Clinton also took aim at state-owned companies and state control over the nation's growing wealth, a reference to the ruling Communist Party's tight rein on key assets, and said: "Now, there is nothing new about countries using economic power to force others to bend to their will. But today the resources at their disposal are unprecedented."

Earlier, Beijing had expressed strong opposition to a vote by the US Senate that passed a legislation targeting China's management of its currency, the Yuan.

The US Senate had recently passed a controversial currency bill that threatens to punish China for so-called 'currency manipulation' with retaliatory tariffs, despite strong opposition from China and many US business groups.

The Currency Exchange Rate Oversight Reform Act, sponsored by Senators Charles Schumer, Sherrod Brown and other Democratic and Republican Senators, was passed in a 63-35 vote in the Senate.

The bill is directed at the Yuan, which the US claimed is undervalued to make Chinese exports to the US cheaper.

China's Ministry of Commerce had said that the move has seriously violated international regulations and sent a wrong signal of escalating trade protectionism.

According to the report, the Senate bill mainly aims to make it easier for the US to designate China as a 'currency manipulator' and slap retaliatory tariffs on goods imported from China.

China has voiced its strong opposition to the US Senate's passing of the bill, warning the US politicians against politicizing the issue of China's currency and resorting to trade protectionism.

China's Vice Foreign Minister Cui Tiankai had warned that the bill could trigger a 'trade war' and hold back global economic recovery.

"(The currency bill) in no way represents the reality of the economic and trade relationship between China and the United States, and it might have an adverse impact on the development of the relations between the two countries," Tiankai said.

"Should the proposed legislation become law, the only result would be a trade war between China and the US and that would be a lose-lose situation for both sides," he added.

ANI

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