Timothy F. Geithner, in the process of confirmation as the next Treasury secretary, has bluntly stated that the new administration thinks Beijing is “manipulating” its currency and will act “aggressively” using “all the diplomatic avenues” to change China’s currency practices.
China’s control of the value of the yuan, analysts say, has kept the currency artificially cheap for years, allowing the Chinese to build massive reserves through trade surpluses and making it harder for many countries, including the United States, to compete with goods made there. It has created what many analysts call a global imbalance in wealth, with the Chinese reaping huge profits even as the United States has sunk further into debt, much of it financed by the Chinese.
Geithner’s comments are almost sure to anger China, which has already bristled at less aggressive comments by outgoing Treasury Secretary Paulson.
Consensus among the China watchers and other worry-warts is that this stance will alienate China and put a crimp in our trade with them. Man, I sure hope so. If China can be forced to let their currency float on the market, they’ll become a whole lot less competitive and massive US importers like Walmart, that made fortunes while wrecking our manufacturing base, will have to start buying from American manufacturers again. China is a bloated economical nightmare that our wealthy corporations fed and fattened and it’s time to let that pig forage on its own.
It’s funny but Geithner and Obama are coming off as Right Wing Hawk types on this issue. Bush whined to the Chinese about this same issue but shut up when the Chinese made threats and refused to comply. This just gets more interesting to watch all the time.
As I said in my No Duh News post, “taking a hardline” means “stating the obvious.”
I tried to leave a reciprocal comment on your blog 4 times. It can’t be done on IE or Mozilla.
No economist but common sense suggests the power of China is overrated, sure they hold enormous dollar reserves but to use them to damage the US would only kill their export markets and drive down their own economy. The US and Europe can stand to drop standard of living a lot more than China before it hurts.
They also free load on the US with much of their hardware/software being copied or pirated.
I think in a year’s time even you will agree that Obummer is an improvement on Bush although admittedly that is hardly difficult. See O has ended the ban on abortion funding today too. Moving away from all this right wing Christian crap, about time.
sounds like we are becoming a little fan there Xoggoth, hes only a couple of days in the job, be sure he will fuck up and pissing off the chinese is a good way of doing it. The US do have depts with China and in this economic shit bucket we are in im sure it would be bad for America if China wanted some of the money back and stopped exports. I would put anything past China.
Wouldn’t say fan M, as have said before I reckon he is a bit of an empty Tony Blair sort and the expectations are daft. Still, I reckon US foreign policy and domestic policy on some issues will be improvements.
China:
http://gatesofvienna.blogspot.com/2009/01/gates-of-vienna-news-feed-1252009.html#8157