–Leaders of Key House Panel Criticize China’s Currency Policy
–Acting Chair Levin: Status Quo ‘Is Not Sustainable’ Re China Forex
–Rep. Levin: China Currency Policy ‘Bad For the World’
–Rep. Camp: China Currency A Problem, But U.S. Should Not ‘Obsess’
–Think Tank Analysts Back Call To Label China A ‘Manipulator’

By John Shaw

WASHINGTON (MNI) – Rep. Sander Levin, the acting chairman of the
House Ways and Means Committee, and Rep. Dave Camp, the top Republican
on the committee, Wednesday said that China’s currency is significantly
undervalued, that this is a problem for the U.S. and the world, and it
should be resolved mulitaterally, perhaps by the IMF.

At a hearing on China currency issues with a panel of think tank
analysts, Levin said that an undervalued currency is part of China’s
“clear strategy” for export-driven growth.

He said that this undervalued currency hurts the U.S. and the broad
negative consequences of this policy “will not go away” on their own.

“I think the status quo is not sustainable,” he said, adding that
China is quick and unfair to decry any criticism of their currency
policy as protectionism.

But Levin said that the China currency issue is best tackled in a
multilateral context, adding that the IMF is “the most logical place”
for these discussions to occur.

“There is no easy answer to the problem,” he said.

Camp said that while China’s currency policies are a problem,
“let’s not pretend that China’s intervention in the currency markets, by
itself, is the root cause of our 10% unemployment or of China’s 10%
annual GDP growth.”

Camp said that while currency issues are a key aspect of the
bilateral economic relationship that needs to be addressed, the U.S.
“should not obsess over the value of the RMB.”

Camp said the administration should create a “robust, multilateral
process — either in the G20, IMP or elsewhere–so that other countries,
particularly some of China’s neighbors in Asia, can bring new points of
pressure to bear.”

Several witnesses before the panel made a vigorous case for the
U.S. declaring China as a currency manipulator in its next foreign
exchange report that is due in mid April.

Both Fred Bergsten, director of the Peterson Institute for
International Economics, and Niall Ferguson, a Harvard professor, said
this declaration would be a statement of fact.

“There is no point pretending that this is not ‘currency
manipulation,’ and in its April 15 report the U.S. Treasury should call
a spade a spade,” Ferguson said.

** Market News International Washington Bureau: 202-371-2121 **

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