As you’ll see in this item from Bloomberg News, People’s Bank of China Assistant Governor Ma Delun said on Friday that the market is determining the value of the Chinese currency (yuan), that it is not being manipulated by the Chinese government. Looks like Governor Ma may have had too much maotai.
The Chinese have been amassing their reserves of US dollars in an effort to keep the yuan deliberately undervalued. Ma claimed that the currency wasn’t to blame for the US trade deficit, adding that, ” Workers’ pay in China is 1/33rd of that of a U.S. worker. The U.S. has to accept this global reallocation of industries.”
Truth is, even the AFL-CIO agrees with us that currency is a bigger cause of the trade deficit with China than any other factor. Our wages are higher, but so is our productivity. We have the best manufacturing workers in the world, period. We can compete with anyone if we all play by the same rules. We have long been at the forefront of efforts to get the Chinese to stop manipulating their currency and will not rest until we succeed.
Here’s a link to our press release, reacting to Governor Ma’s whopper.
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