Bloomberg News’ Mark Drajem reported yesterday that the World Trade Organization (WTO) is urging China to revalue its currency, the Yuan.  The WTO’s comments join steady calls from the EU, Japan, and concerned U.S. legislators to end the manipulation of its currency that has seen China devalue the Yuan by as much as 40%.

  Specifically, the WTO report noted that “A more flexible exchange rate regime could enable China to operate a more independent monetary policy, which would be better suited to ensuring a low and stable rate of inflation.”

What’s interesting to note is that essentially the entire world is concerned with China’s currency practices.  Everyone that is except some U.S. lawmakers and the Bush administration.  Even though China has been rigging its currency exchange rates since 1994, and has continued to do so despite promises to the contrary when joining the WTO in 2001, the Bush administration has steadfastly refused to take concerted action.

As ManufactureThis noted last week, the Treasury Department once again refused to characterize China’s currency practices as outright “manipulation,” thus avoiding any effective action to rectify the problem.  Treasury Secretary Henry Paulson has frequently suggested that China should raise the value of its currency, and has praised any incremental steps in this regard.  But he has refrained from taking any serious action.

The end result is simply “chit-chat diplomacy”—a nod, a wink, a smile…and no effective change in the status quo.

Next month, a delegation from Beijing will meet in Annapolis with U.S. officials for negotiations in the latest semi-annual Strategic Economic Dialogue (SED).  As with previous SED’s, little of substance will be accomplished.  In the interim, the U.S. continues to shed good-paying jobs due to China’s mercantilism.

  The China issue will be of significant note come the fall presidential election.  Hopefully all of the candidates will be talking about this, and will express their desire to stand up to Beijing.

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This entry was posted on Thursday, May 22nd, 2008 at 6:33 pm and is filed under Holding China Accountable, Currency Manipulation, Enforcing Trade Laws. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.