Those in Washington who protect the protectionism of China seem to always trumpet any Chinese announcement that the country will possibly allow it currency to appreciate. How they can claim to be free traders while supporting that government’s currency pegging is beyond me.
We now know that China’s currency was falling against the dollar during May.
The Obama Administration refuses to act, and John Boehner and Dave Camp continue to block a House vote that would help solve the problem.
The Treasury Department continues to “urge” China to let its currency values float with out the massive government intervention required to peg their renmimbi to the dollar. But Treasury implausibly refuses to label China a currency manipulator:
The Treasury Department issued a report last Friday criticizing China’s management of its exchange rate and calling for the first time for China to release data on the scale of its foreign exchange market interventions. But the report stopped short of labeling China a currency manipulator, a label that Chinese leaders have indicated they would bitterly resent and oppose.
The scale of this problem is massive. China’s currency undervaluation is 25-40%. That is a 25-40% price advantage when selling to the U.S. and competing with domestic firms here… courtesy of the Communist Party of China. Boehner, Cantor, Camp and the Administration are coddling and supporting this currency price manipulation as the U.S. economy slides back towards recession.