WASHINGTON—China's move toward a more flexible exchange rate has been "too slow," Treasury Secretary Timothy Geithner said Thursday, even as U.S. lawmakers pushed for more aggressive action to respond to Beijing's policies.
"We are very concerned about the negative impact of these policies on our economic interests, and are pursuing a carefully designed, targeted approach to address these problems," Mr. Geithner said in the first of two appearances on Capitol Hill scheduled for Thursday.
However, he signaled that the Obama administration remains reluctant to formally label China a currency manipulator under U.S. law. While the U.S. feels the yuan is "significantly undervalued," a formal designation would "not be a particularly effective tool" for achieving U.S. goals.
The importing of significantly cheaper goods may have affected local businesses in the US but it must also be remembered that it allows benefits to the consumer by increasing their purchasing power. Mr. Geithner has mentioned in the article that he does not want to strain trade relationships between China and the US, as US exports to China are at a growth stage, thus helping the local economy.
ReplyDeleteIf the Yuan goes up, the prices of everything will go up as the US does not have the infrastructure or the capacity to produce the goods it imports from China. Therefore, although increasing the Yuan will eventually help the US economy, it is also likely to hurt it quite a bit.