China Says Currency Not “Undervalued”

Despite American claims that China’s refusal to allow the yuan to appreciate risks the global recovery, China’s Premier Wen Jiabao made it that China has no intention of allowing the yuan to increase in value.

“I don’t think the renminbi is undervalued,” Wen said yesterday at a press conference in Beijing marking the end of China’s annual parliamentary meetings, using another term for the yuan. “We oppose countries pointing fingers at each other and even forcing a country to appreciate its currency.”

Some senior US officials are calling for tarrifs on Chinese exports to both penalize China, and as a way to eliminate the pricing advantage Chinese products receive when costs are converted.

“Chinese officials are alone in their refusal to acknowledge that the yuan is undervalued,” Senator Charles Grassley of Iowa, the ranking Republican on the Senate Finance Committee, said in a statement responding to Wen’s remarks. “If they choose to stick their heads in the sand, we’ll have to find another way to address this problem because it’s been going on for far too long.”

Source: Bloomberg

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