China's Currency Change Could Boost US Exports: Hochberg
Anchor, Worldwide Exchange
China's currency announcement has the potential to boost American exports, says Fred Hochberg, President and Chairman of the US Export-Import Bank.
"The key thing with China and its currency will be the implementation, how long it takes and at what pace they do it. That's really going to be critical. Talk is important, but talk is talk, it has to be of action," Hochberg said.
While the pace is important, Hochberg also said the symbolism of the announcement is equally as powerful. "Artificial markets create a lot of distortion, so i think what's important is the move and the signal that this will now have some degree of float, some degree of market orientation, and then we have to let market forces take over," Hochberg said on CNBC's "Worldwide Exchange."(Watch video of Hochberg's comments below.)
"I think sometimes the currency gets overblown by, you know, price is a factor in this decision, it's not the sole factor, whether it's Toshiba , or it's Boeing , or any company, it's quality, it's reliability, it's standing behind your product, these are the kind of things American companies do," says Hochberg.
The Ex-Im Bank, U.S. government's official export-credit agency, isn't just focused on China, though. Southeast Asia is a major focus of its efforts to help American companies create jobs domestically by selling more abroad. Vietnam and Indonesia are two of the nine countries chosen by Ex-Im for their major export growth potential.
"There is more and more manufacturing moving to Vietnam. People call it the "un-China" or the "non-China." China has great infrastructure, in terms of the roads, airports, ports—that's very good for commerce. But there's other restrictions that make people nervous about having everything in one place," Hochberg said, in reference to China's communist government and reasons why some US businesses are interested in Vietnam.
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