Tuesday, November 29, 2005

Business Groups Rally Against Bush Administration


U.S. manufacturers are speaking out against China's monetary policy --
and what they say is the president's unwillingness to confront the issue.

In the wake of President Bush's recent trip to Asia, a coalition of U.S. business groups is assailing the administration for failing to press China to revalue its currency, which many say unfairly favors Chinese manufacturers and constitutes a violation of China's free-trade obligations.

More than 40 manufacturing trade groups, including the Steel Manufacturers Association, have formed the China Currency Coalition with the U.S. Business and Industry Council to oppose what they consider China's illegal manipulation of its currency. The Coalition favors passage of a Congressional bill that would allow U.S. businesses to file suit against China with the World Trade Organization on the grounds of currency manipulation.


Since the beginning of 2003, the dollar has fallen almost 12% against the euro, while it has risen 2.5% in value against China's currency, the yuan. Economists say China has suppressed the rise in its currency by purchasing, on average, $200 billion per year in Treasury bonds and other U.S. securities.


"China's currency is as much as 40% under-valued compared to the dollar, and I believe it moves further out of alignment each month," said Morici. "A few percentage points won't change that."

Doug Bartlett serves as chairman of family-owned Bartlett Manufacturing in Cary, Ill., which makes high-end electronic circuitry. Since 2000, Bartlett's annual revenue has fallen from $22 million to $8 million, and his workforce has shrunk from 250 to 67.

"We're not competing with Chinese businesses," Bartlett said. "We're competing with the Chinese treasury, and it would take a superhuman effort to win that battle."

No comments: