US blaming of yuan misplaced ( 2003-09-03 07:15) (China Daily)
United States Treasury Secretary John Snow is in
Beijing passing on US concerns about the value of our currency, the yuan or
renminbi.
Timely communication and consultation are essential
for the United States and China, two of the most active and important players in
world trade. This is especially so as economic woes worldwide are crying out for
an effective cure.
Considering the sheer size of the two countries' exports and imports to and
from each other alone, how the two act and interact will have an impact on the
world economic scene.
Exactly because of such high stakes, reason should always be used when the
two economies react to each other.
What has pushed Snow to our doorsteps, however, is a tide of complaints that
display a gradual drain of sensibility in his home country.
From Washington to major manufacturing bases, the arguments are rampant that
China should be held accountable for the economic troubles dogging the United
States. It is claimed that by artificially keeping its currency weak, China has
gained unfair advantages for its cheap exports to the United States, thus
throwing US citizens out of work. A well-touted prescription that is also
favoured by the White House is the appreciation of the yuan.
Even Japan has jumped on the bandwagon, even though it fell into further
economic misery after it raised the value of its own currency under US pressure
in the 1970s.
The calls are so overbearing that it would appear that all countries are the
victims of Chinese selfishness. So, unless China stops being selfish and
re-evaluates the yuan, the United States will suffer, Japan will suffer, and the
rest of the world will suffer.
It no longer matters how unselfish China was during the 1997 Asian financial
crisis. The very same decision, once acclaimed as heroic, not to devalue our
currency when our neighbours did is now coming under fire.
Neither does it seem to matter whether the economic difficulties of the
United States and Japan have their roots in those countries.
China is now on trial. As reason gives in, an issue that is economic in
nature is dressed up in a weighty political matter.
Snow talked about growth during his visit to Japan earlier this week. He is
obviously aware of the significance of growth for an economy.
The US and Japanese economies must grow to get out of their current plights.
The Chinese economy cannot afford not to grow. Once the Chinese economic
locomotive loses steam, so does the world's.
In this sense, China's idea of basing its currency policy firmly on its own
national conditions is in itself a contribution to the world as a whole because
this policy delivers genuine benefits.
As those with insight have observed, the appreciation of the yuan may
ultimately go against the intentions of its advocates by throttling the Chinese
economy and damaging their own economies in return.
After all, our economies are now interwoven more tightly than ever.
For the well-being of the Chinese and US economies, as well as that of the
world, both Snow and his Chinese counterparts should follow the dictates of
reason in their dealings with the now politically charged topic.
Timely communication and consultation are essential
for the United States and China, two of the most active and important players in
world trade. This is especially so as economic woes worldwide are crying out for
an effective cure.
