China Will Always Look for Reasons to Avoid Currency Action

By May 25, 2010Economy, Trade

From Radio Free Asia, “China Fears Euro Slide,” reporting on the Chinese government’s protests that the decline in the Euro’s value ties its hand on revaluing its own currency.

Patricia Mears, director of international commercial affairs at the National Association of Manufacturers in Washington, said there will always be new reasons to put off currency reforms.

“They are never going to find a perfect time. There are always going to be conditions that could be of concern to them,” said Mears. “But the reality is the longer they put this off, the more protectionism grows around the world.”

“Basically, the Chinese have got to end this policy,” she said.

In March, 130 members of the U.S. House from both parties urged the Obama administration to slap duties on Chinese goods because of its currency policy. Fourteen senators also sponsored bipartisan legislation that could impose tariffs if China fails to act on the yuan.

Mears said lawmakers are unlikely to be swayed by the euro argument after the United States recorded a $51.7-billion trade deficit with China in the first quarter of the year.

“I think it’s highly unlikely that they’re going to give China a pass,” said Mears.

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