As several major business groups, particularly the National Association of Manufacturers, continue to push the Bush administration to press China to float its currency, Federal Reserve Board Chairman Alan Greenspan says he sees "no credible evidence" such revaluation would boost U.S. manufacturing.
Stressing that he was speaking for himself and "not necessarily" reflecting the views of the Board, Greenspan told the Senate Finance Committee June 23, "Some observers mistakenly believe that a marked increase in the exchange value of the Chinese [currency] relative to the U.S. dollar would significantly increase manufacturing activity and jobs in the United States." Bluntly stated Greenspan, "I am aware of no credible evidence that supports such a conclusion."
Greenspan also attacked Congressional proposals to impose a broad tariff on Chinese goods as a means to sustain U.S. jobs, especially in manufacturing. "A policy to dismantle the global trading system in a misguided effort to protect jobs from competition would redound to the eventual detriment of all U.S. job seekers, as well as millions of American consumers," he asserted. "Policy should aim to bolster the well-being of job losers through retraining and unemployment insurance, not to stave off job less through counterproductive efforts to impede the process of income-enhancing international trade and globalization."