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China Urges U.S. Lawmakers to Avoid Damage Over Yuan Legislation

Schumer is preparing to reintroduce legislation aimed at forcing China to raise the value of its currency. Photo: Spencer Platt/Getty Images
Schumer is preparing to reintroduce legislation aimed at forcing China to raise the value of its currency. Photo: Spencer Platt/Getty Images

June 16 (Bloomberg) -- China urged U.S. lawmakers not to damage relations between the two countries by seeking “excuses to start trade protection,” following moves to reintroduce legislation aimed at forcing an appreciation in the yuan.

“The exchange rate isn’t the major reason for trade imbalances,” Hong Lei, a spokesman for China’s Foreign Ministry, said at regular briefing in Beijing today. “We urge relevant senators of the U.S. government to see the importance of Sino-U.S. relationship clearly, don’t seek excuses to start trade protection, and avoid damage to the big picture of Sino-U.S. trade and economic cooperation.”

Hong’s comments come as Senator Charles Schumer, a New York Democrat, prepares to revive legislation aimed at pushing China to raise the value of its currency, according to a letter he sent to colleagues.

The measure would let U.S. companies petition for duties on imports from China to compensate for the effect of a weak yuan, which lawmakers have said gives Chinese companies an unfair advantage against U.S. manufacturers.

China’s currency “is one of the few issues where you get unanimity across the board” among voters, Senator Bob Casey, a Pennsylvania Democrat, said yesterday at a news conference. Casey is one of seven senators sponsoring the measure with Schumer, according to the letter.

Schumer proposed similar measures in each of the past six years and none have been voted on in the Senate. Brian Fallon, a spokesman for Schumer, didn’t return telephone and e-mail messages.

U.S. Treasuries

The House in September passed a parallel measure, which never reached the Senate for a vote. A similar measure on China’s currency was introduced in the House in February with more than 100 sponsors.

China is the biggest foreign investor in U.S. Treasuries, after its holdings rose by $7.6 billion to $1.2 trillion, according to a Treasury Department report yesterday.

The yuan has appreciated about 5 percent against the dollar in the past year, while remaining “substantially undervalued,” William Cline, a fellow at the Peterson Institute for International Economics in Washington, said June 8.

“What’s new is that the seeming efforts of China to start moving” still “doesn’t get the job done,” Cline said in an interview published on the group’s website.

To contact the reporters on this story: Mark Drajem in Washington at mdrajem@bloomberg.net; Yidi Zhao in Beijing at yzhao7@bloomberg.net

To contact the editors responsible for this story: Larry Liebert at lliebert@bloomberg.net; Peter Hirschberg at phirschberg@bloomberg.net

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