- China said in June that it would permit market forces greater sway in setting the yuan’s value, yet it has only appreciated about 0.6 percent since then.
Both Xinhua News Agency and China Central Television reported Thursday on the debate in Washington D.C. over whether to pass legislation to punish China for keeping the value of its currency low. It was a rare instance in which China’s state-media were willing to publicize foreign criticism of a central government policy, although the emphasis in both reports was on U.S. politicians and businessmen who think that punitive action over the currency will hurt U.S. economic interests without fixing the underlying problem of the U.S. trade imbalance.
Rep. Lynn Jenkins (R, Ks.) got singled out for special mention by Xinhua, who reported her as saying that proposed legislation targeting China’s currency policy will trigger more job losses in the U.S.
Xinhua went on to quote Ms Jenkins arguing that U.S. agricultural exports to China have grown strongly in recently years and any actions must be considered “in the broader context of how it will affect the entire U.S. economy.”
Frustrations in the U.S. at the perceived unwillingness of Beijing to let the yuan appreciate were put to one side a couple of months ago when Beijing announced to much fanfare that it was shifting to a new currency regime and unleashing the yuan from its de facto peg to the dollar.
But with the yuan having only appreciated marginally against the U.S. unit since then, those long simmering tensions are now coming to a boil. Not only did the House Ways and Means Committee discuss the issue Wednesday, but Congress will host two other hearings Thursday that will deal with China’s foreign exchange policy .
China’s state media is clearly conveying that its measured and (painfully) slow approach to allowing the yuan to rise does have support outside of China, despite criticisms coming from all directions. Most recently, World Bank President Robert Zoellick told China a stronger yuan was in its own best interests while he was visiting Beijing Wednesday.
But by singling out people within the U.S. government as lining up against taking action over the yuan, China’s state media might be also sending a more nuanced message to its audience: That U.S. politics are complex and that even if anti-China legislation does pass, “America” isn’t to blame.