Obama Administration to take firm stance against Chinas exchange rate policy

January 24th, 2009 - 2:03 pm ICT by ANI  

New Delhi, Jan 24 (ANI): US Treasury Secretary-elect Timothy Geithners remarks that China is manipulating its currency, suggests that the Obama Administration will take a firm stance on its economic policies toward Beijing, local analysts said on Friday.
Geithner told senators on Thursday the new administration will press China to change its exchange rate policies, the China Daily reported.
His comments were a clear move away from the stance of the Bush Administration, which did not label China as a currency manipulator.
The new US government seems to be harsher regarding Chinas exchange rate policy, Sun Lijian, an economist with Fudan University, said.
More comments about China violating intellectual property rights and dumping charges on Chinese exporters will follow, he said.
Such statements, along with the accusation about currency manipulation, are designed to pressure China to do more to help the crisis-battered US economy, he said.
The US is deep in recession. It is in dire need of help from outside, said Ma Ming, an economist with the Beijing Institute of Technology.
After building up a huge deficit with its costly market rescue plans, the US has become increasingly dependent on China and other economies with abundant liquidity to help finance the plans.
China became its largest treasury holder in September, and analysts have said the US now wants Beijing to increase its holdings to provide more liquidity to counter the deficit.
If China toes the US line (to let the Yuan rise further), its exports will take another battering and its economy will worsen, analysts said. (ANI)

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