US may label China ‘currency manipulator’

Since China famously revalued the Yuan last summer, trade lobbyists and protectionists have continued to urge the Bush administration to pressure China on its exchange rate policy. In a sign that it may be bowing to popular demand, the US Treasury Department recently announced it may officially label China a ‘currency manipulator,’ in its biannual report to be released in April. The label would provide a basis for trade and
economic sanctions. Chinese officials have considered the possibility of such an accusation, but continue to maintain that the Yuan will be adjusted at China’s pace. This is not surprising, as China’s exchange rate policy is determined at the highest level of political decision-making. The Wall Street Journal reports:

Chinese exchange-rate policy will be guided not by politics but by calculations on how any changes will affect domestic growth. “Nobody thinks” the U.S. will label it a currency manipulator, which would require formal talks with China on the issue.

Read More: China Holds Line on Yuan Policy Despite Risk of `Manipulator’ Tag