Congressmen Seek Action On Chinese Currency

A bipartisan group of 87 members of the US House of Representatives has written President Bush
urging him to take action promptly on what they say is China’s unfair and discriminatory
undervalued currency. The letter charges that China’s maintenance of an undervalued exchange rate
for its currency constitutes an export subsidy and is in violation of various international legal

Noting that administration officials on a number of occasions have criticized the Chinese
currency situation, the members of Congress expressed their disappointment at the Bush
administration’s failure to use US trade laws to help offset the damage to US manufacturers
resulting from Chinese trade. The letter said “given the concerns that you and we have about this
serious issue, we respectfully and strongly urge you to continue to press China for meaningful and
expeditions currency reform.”

US textile manufacturers have been particularly concerned about the Chinese currency issue,
charging that it amounts to as much as a 40 percent subsidy for China’s clothing and textile
exports. Cass Johnson, president of the National Council of Textile Organizations, says China’s
currency manipulation so distorts the free market that literally no other country can compete today
with China’s exports. Up to this point, administration trade officials have recognized the problem,
and discussed it with Chinese officials, but to no avail. With China’s vice premier due to visit
the United States later this year, the members of Congress urged the president to use that occasion
to press the issue.

August 2004