The United States will join hands with other countries to exert pressure on *** appreciation

At a hearing held by the US Congress on international economic and currency exchange rate policies, Treasury Secretary Timothy Geithner said that the United States would join forces with other countries in putting pressure on China and suggested that the current round of RMB appreciation should be at least 20%.

U.S. Congressional Hearing: Calm Diplomacy Has Almost Failed

On the 17th, the central parity of the renminbi against the US dollar was reported at 6.7172. This week, the renminbi has risen 337 basis points against the US dollar.

However, the recent changes in the renminbi still cannot quell the U.S. government’s groundless accusations of the yuan’s exchange rate policy. In order to boost the economy, especially when the U.S. mid-term elections are approaching in November, U.S. Congress has once again put pressure on the renminbi and has launched a two-day hearing. The hearing will have two focuses: First, whether China has made “substantive” progress on the issue of appreciation of the renminbi against the US dollar, whether China is listed as a “exchange rate manipulator”, and whether it should impose punitive tariffs on Chinese exports. And determine the impact of this policy on employment in the United States and the recovery of the global economy.

According to local media reports, some participants stated that the calm diplomatic approach has basically failed, and the only thing that sparked controversy is what new approaches should be tried. The most daring way to discuss the meeting was alleging that China’s exchange rate policy violated China’s commitment to the World Trade Organization.

Li Daokui, monetary policy expert: RMB does not have significant conditions for appreciation

“The United States’ release of the 'renminbi undervalued' remarks was totally unexpected, because the US style has always been 'thunder-thundering and little rain' on the issue of the RMB exchange rate,” said Tang Yaling, dean of the China Institute of Foreign Exchange Investment Research. It is expected that "in view of the strategic partnership between China and the United States, the bill will result in a loss of both sides, so the possibility of the United States passing the 'RMB Exchange Rate Act' is very small."

In addition, the US Treasury Secretary Geithner also said that the United States will join forces with other countries to put pressure on China, and hinted that the current appreciation of the renminbi should reach at least 20%. Tan Yaling pointed out that "The United States had accused the renminbi of being undervalued by 20% five years ago. Now that the renminbi has risen more than 23% since the exchange rate reform, it is not reasonable for the United States to say that the yuan is undervalued."

Li Daokui, member of the Central Bank’s Monetary Policy Committee, recently stated at the Davos Forum that China’s trade surplus is narrowing, that the renminbi does not have a substantial appreciation condition, and that the renminbi’s exchange rate flexibility has gradually increased. In the future, China will adjust the renminbi value according to its own needs.