China's low currency is a big cost for the US
Updated
Members of the United States Congress have asked the Commerce department to investigate allegations that the government of China manipulated its currency, the renminbi.
The bipartisan Congressional request calls on the Commerce department to investigate if China's refusal to allow its currency to rise in value, amounts to a form of subsidy.
Presenter: John Shovelan
Speakers: Charles Schumer, Democrat Senator; Sam Brownback, Republican Senator; Timothy Geithner, Treasury Secretary
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JOHN SHOVELAN: Members of Congress are frustrated by China's steadfast refusal to allow the value of the yuan to rise.
Both Democrat:
DEMOCRAT CONGRESS MEMBER: They give their back of the hand to the world economy.
JOHN SHOVELAN: And Republican:
REPUBLICAN CONGRESS MEMBER: I just think it's time to get the, get the stick out.
JOHN SHOVELAN: The first stick is the request to the Commerce Department effectively seeking a ruling on whether China's currency link to the US dollar is a form of protectionism.
Democrat Senator Charles Schumer says it's costing American jobs.
CHARLES SCHUMER: Today there are certainly hundreds of thousands and maybe even more Americans who are out of work because the Chinese are unfair and manipulate their currency.
JOHN SHOVELAN: Senator Schumer believes there should be tariffs on Chinese imports in retaliation.
CHARLES SCHUMER: Nothing is more important than this.
JOHN SHOVELAN: Growing Congressional pressure on China is part of a broader effort to do something about unemployment in the United States. A new OECD (Organisation for Economic Cooperation and Development) forecast says the US unemployment rate, now at 10.2 per cent, won't peak until it hits 10.9.
The jobless are now also driving a second wave of home foreclosures and the proportion of home owners with a mortgage who are either behind on their payments or in foreclosure hit a record high for the ninth straight quarter.
Republican Senator Sam Brownback says given the state of the US economy it's understandable the greenback is weakening, but the Chinese currency he says should be strengthening.
SAM BROWNBACK: No appreciation, none, they have pegged their currency to ours at a time when our currency is falling and you can see reasons for why it would fall, that the Chinese currency should clearly be going up against that.
JOHN SHOVELAN: But the Treasury Secretary Timothy Geithner says he believes members of Congress wouldn't have to wait long before China does allow its currency to appreciate.
TIMOTHY GEITHNER: I think it will change over time and my own sense is it's not going to actually take that much time.
