CHINA / National
China calls for US senators to halt tariff bill
(Reuters)
Updated: 2006-09-27 17:02
BEIJING - China on Wednesday called for US Senators Charles Schumer and
Lindsey Graham to stop seeking a vote on their bill threatening tariff on
goods from China.
Schumer, a New York Democrat, and Graham, a South Carolina Republican,
said on Tuesday that they needed to have further discussions before
making a final decision on whether to hold a vote on their bill.
"We hope the US senators will objectively and rationally look at problems
occurring in the process of the rapid development of Sino-US trade
relations and stop deliberation of the bill that could damage Sino-US
trade cooperation," the foreign ministry said in a statement faxed to
Reuters.
The bill, which is opposed by most US business groups, directs the White
House to impose a 27.5 percent tariff on goods from China if Beijing does
not significantly raise the value of its currency within six months.
The proposed legislation reflects a widespread US view that China's yuan
is significantly undervalued, giving Chinese companies an unfair trade
advantage over US firms.
Chinese officials have consistently pledged to make the yuan more
flexible over time, saying any change would mainly stem from the needs of
China's economy.
Chinese government economists also said it would be advisable for Schumer
and Graham to drop their bill, on which the two had said earlier they
might push for a vote later this week.
"Their proposal itself violates international trade principles and it
would be very wise for them to drop it," said Ba Shusong, vice head of
the financial research institute at the Development Research Centre, a
think tank under the cabinet.
China's yuan quickened its pace of appreciation and hit a fresh
post-revaluation high against the dollar on Wednesday amid speculation
that Beijing and Washington may have reached an understanding on the
Chinese currency's rise.
It traded as high as 7.9025 to the dollar, close to the psychologically
important level of 7.9000. It has now appreciated a further 2.6 percent
since it was revalued by 2.1 percent and freed from a peg to the dollar
in July 2005.
Gao Huiqing, a senior economist at the State Information Centre, a
government think tank, said that even if US pressure for the yuan to
appreciate appeared to be waning now, such a trend would be short-lived.
"Every time after top US officials visit China, their pressure on yuan
appreciation eases," Gao said.
Many analysts believe US pressure could be counterproductive.
Paulson visited China last week, where the two countries announced the
start of a new strategic economic dialogue that would address the
long-term issues in their relationship.
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