US hearing on yuan's exchange rate

The U.S. House of Representatives Committee of Ways and Means held a hearing to discuss the RMB exchange rate on Wednesday. Some experts and congressmen support taking a tough line on Yuan appreciation, while others are more cautious.

Economists from key universities such as Harvard talked about how China's exchange rate policy will affect global economic recovery and US employment. They said that China had taken advantage of its undervalued currency in conducting global trade.

The Committee's chairman, Sander Levin, said China should change its strategy of artificially driving down the Yuan's value, in order to promote exports.

However, some others pointed out that the US should not focus solely on the RMB issue, while neglecting other major trade problems.

A Texas Republican raised some doubts about the US proposals to unilaterally impose tariffs on China. He said the new tax proposals conflicted with the US obligations to the WTO, and that the move would draw retaliation on US exports. He went on to say that the proposed tariffs will raise prices in the US, and lead to inflation. He said the US should consider the issues in a broader sense.

Economists from key universities such as Harvard talked about how China's exchange  rate policy will affect global economic recovery and US employment.

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