US lawmakers in China as yuan battle heats up
Afp, Beijing
Two US lawmakers hoping to pressure China into revaluing its currency began talks here Tuesday, insisting they were still worried about the yuan despite encouraging signs of flexibility last week. Democratic Senator Chuck Schumer and Republican colleague Lindsey Graham's trip comes ahead of a threatened March 31 vote in the US congress on a bill they have co-sponsored to impose a 27.5-percent tariff on China's US-bound exports unless Beijing revalues the yuan. "We've been stymied and worried that we haven't seen much progress thus far," Schumer told reporters ahead of a day of talks with Foreign Minister Li Zhaoxing and other officials. At the same time, there were some cause for hope. "The last week has been encouraging. We want to know if that will continue," he said, referring to the Chinese currency's gain of 0.24 percent on the dollar last week, the fastest and largest movement since a revaluation in July. Graham also described last week's developments as encouraging but questioned: "Why the movement now, why not before?" The yuan has risen only by about three percent against the dollar since its peg to the dollar was removed in July and it was linked instead to a basket of currencies. The senators have argued that the yuan is undervalued by as much as 40 percent against the dollar, dealing a crippling blow to US companies trying to compete against Chinese rivals. The exchange rate, the senators and other US critics contend, helped to drive up China's trade surplus with the United States to a record 202 billion dollars last year. Li told the senators that differences should be resolved through consultation, according to the Chinese foreign ministry. "We should not politicize those issues and magnify those issues," ministry spokesman Qin Gang quoted Li as saying. Qin told a regular briefing the senators said they hoped China will take measures on the exchange rate and trade issues but agreed that Washington and Beijing "should not make rifts between our two countries with those issues." The two lawmakers, accompanied by Republican Senator Tom Coburn, will have talks with the National Development and Reform Commission, China's top planning agency on Wednesday. They will also visit Shanghai and Hong Kong.
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