U.S. News

U.S. Lawmakers Prod China's Wu on Trade, Currency


U.S. lawmakers stepped up pressure on China over trade on Wednesday, giving mixed reviews to high-level economic talks and urging China's top economic envoy to address complaints about China's currency.

The powerful House of Representatives Ways and Means Committee told Chinese Vice Premier Wu Yi that China was flouting world trade rules by manipulating the value of its currency to boost exports and distorting trade with subsidies.

"The committee has serious concerns about China's massive and constant interventions in the currency markets," it said in a letter given to Wu when she visited Capitol Hill following two days of talks with Bush administration officials.

"Those interventions keep the value of the Chinese currency, the renminbi, artificially  low -- making exports from China relatively cheap and imports into China relatively expensive," said the letter, signed by Ways and Means Committee Chairman Charles Rangel, a New York Democrat, and other senior lawmakers on the panel.

Rangel told reporters after meeting with Wu and senior Chinese officials that he planned to move legislation aimed at China's currency practices. Although the U.S. Treasury Department has been leading talks with China on the currency issue, Rangel informed Wu of Congress' constitutional authority over trade.

"I had to make it abundantly clear that we speak on behalf of the people of the United States and we give limited power to the executive branch to negotiate trade on our behalf," Rangel  said.

House Speaker Nancy Pelosi said she raised a number of concerns with Wu, including currency, piracy and counterfeiting of U.S. goods in China, genocide in Darfur and human rights in China and Tibet. "I believe that the Chinese can do more in each of these areas," the California Democrat said.

Other senior lawmakers also expressed frustration with the lack of progress on a number of trade irritants in the two-day "strategic economic dialogue" (SED) with the Bush administration.

"I am deeply concerned that the SED did not address China's unscientific and WTO-inconsistent ban on U.S. beef or the undervaluation of China's currency," said Senate Finance Committee Chairman Max Baucus, a Montana Democrat.

Senate Banking Committee Chairman Chris Dodd, a Connecticut Democrat, urged the Treasury Department to formally label China a currency manipulator in a semi-annual report due shortly.

Legislation Looms?

Sen. Charles Schumer, who has teamed up with Baucus to write a bill aimed at forcing China to revalue its currency, issued a statement slamming market access promises that "rarely seem to become reality from China."

"In addition, there is a glaring omission to the Treasury  press release: an eight-letter word, 'currency,'" said Schumer, a New York Democrat and vocal China critic.

The host of the Washington talks, U.S. Treasury Secretary Henry Paulson, said earlier that Wu and her Chinese delegation expected to "hear some strong views" from Congress.

Wu meets with Senate Majority Leader Henry Reid, a Nevada Democrat, and members of the Senate Finance Committee on Thursday, as well as with U.S. President George W. Bush.

Many lawmakers remain angry over China's exchange-rate policies despite Beijing's decision on Friday to widen the yuan's daily trading band to 0.5% from 0.3%.

They believe the currency is undervalued by as much as 40%, giving Chinese companies a huge advantage. "There is a bipartisan sentiment in Congress that we're not being tough enough," said Rep. Tim Ryan, an Ohio Democrat and co-author of a bill that would allow the United States to levy duties against China's exchange-rate "subsidy."

Rangel told reporters he supported that bill.