Furious China Slams Currency Bill as a 'Ticking Time Bomb'

China's Foreign Ministry claims the bill violates WTO rules and warns that it could set off a trade war.

China reacted furiously Wednesday after the U.S. Senate voted to pass a bill designed to punish Beijing for alleged currency manipulation, charging that it violates WTO rules and could set off a trade war.

U.S. lawmakers defied warnings from Beijing and the White House to approve the measure, which leaders of the Republican-led House of Representatives have warned could be "dangerous" for the United States.

The proposal, powered by a tide of U.S. voter frustration at a sour economy and high unemployment ahead of November 2012 elections, calls for retaliatory duties on Chinese exports if the value of the yuan is unfairly "misaligned."

China's Foreign Ministry called it a breach of World Trade Organization rules, while the official Xinhua news agency said it is a "ticking time bomb" that could set off a trade war.

"It is a serious breach of WTO rules, which cannot solve the U.S.'s own economic and employment issues, and will ... seriously interfere with Sino-U.S. economic and trade relations," said Foreign Ministry spokesman Ma Zhaoxu.

President Obama has declined to back the legislation, but accused China of "gaming the trade system" in a way that hurts the U.S. economy.

Republican House Speaker John Boehner has signaled that he will not bring the legislation to a vote, calling it "dangerous" to economic relations between the world's largest and second-largest economies.

Few in Washington dispute the charge that China keeps the yuan low against the dollar, giving its goods as much as a 30% edge over similar U.S. products, widening the American trade deficit and costing U.S. jobs.

But the measure's opponents warn that it risks worsening ties with China, and say a rise in the yuan would merely boost manufacturing and jobs in countries such as Vietnam or Malaysia -- not in the United States.

Copyright Agence France-Presse, 2011

Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish