Sudden appreciation of Chinese currency no good for both
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A sudden appreciation of the Chinese currency is neither good for China nor for the United States, as it might cause tremendous job loss in China and inflation in the United States, a U.S. congressman said Sunday.
"I think over the long haul, there will be a re-evaluation of RMB (renminbi) against the U.S. dollar," David Wu, a Chinese American congressman, told Xinhua.
Wu has been appointed to the U.S. President's Export Council to give advises to the White House on trade issues.
On the issue of whether Washington will label China as a "currency manipulator" if China refuses to appreciate its currency as the U.S. side has asked for, the U.S. congressman said: "We will have to see."
Meanwhile, on whether the U.S. will lift restrictions on exports to China of some high-tech products to reduce the huge trade deficit with China, Wu said: "I don't think it will play a major role in recalibrating the monetary value going back and forth."
But he added that there will be some adjustments on the U.S. side on what things will be on which list. However, he did not go to details.
"I don't think that will be a tremendous monetary effect," he stressed.
He took Oregon, the state he is representing, as an example, saying that Intel is shipping the chip sets to China and put them into final consumer products there and shipping back to the United States.
He said exports of chip sets are of very high value, but not in the sense of high-tech restrictions. This is one way to increase exports to China to reduce the U.S. trade deficit.
He said the currency issue will continue to be important in the trade relationship between the two sides besides diplomacy, national security and environment, and trade relationship is the one that needs to be recalibrated.
Both sides will have major roles to play to make it a sustainable trade relationship, he added.
Wu meanwhile pointed out the need for the United States to make some changes to ways of consumption and investment.
"We, the United States, have over consumed in the short term and under- invested for the long term, and we need to become a more productive society and more investment-oriented society, and that will help our exports," he said.
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