American Currency Act to Receive “Appropriate Response” If Adopted

The Chinese government will not stand idly by, but will respond to the United States, proportionately, if the bill regarding the Yuan becomes law, the Ministry of Commerce announced Monday.

“The currency act proposed by the United States would undermine China’s interests more than those of the U.S. We are strongly opposed to this,” He Ning, Director General of the Department of North American and Oceanian Affairs of the Ministry of Commerce, told the Ministry of Commerce.

“If the bill ends up passing and becoming law, we will not be able to ignore it. We will respond to it, proportionately, without a doubt,” He said, without further comment.

“We have prepared measures designed to address this potential action by the U.S.,” He said.

His remarks came as Chinese President Hu Jintao was expected for the G-20 Summit to be held on Nov. 3 and 4 in Cannes, in the south of France. At this meeting, the leaders of 20 countries must discuss how to deal with the ongoing global economic recession and European debt crisis.

“I don’t know if the subject of Chinese currency will be addressed during the meeting or not,” He said. But European Union officials declared last weekend that, during discussions in Cannes, they would pressure China on the revaluation of the Yuan.

Earlier in October, the U.S. Senate passed a bill allowing the U.S. to impose tariffs on Chinese products as compensation for the so-called undervalued currency.

The proposal must still be approved by the House of Representatives, and then signed by U.S. President Barack Obama, before becoming law.

“Many countries around the world are willing to attack China and its policies, including its currency, when they themselves have problems,” He said.

The unemployment rate in the United States has remained below 9 percent since April and the economic growth of the country returned to 2.5 percent in the third quarter, easing fears that the U.S. economy will fall back into recession. However, economists have warned that the U.S. recovery is still weak.

Experts say that the United States is transferring its own economic problems on to China, by pointing at its economic policies, especially with the 2012 presidential elections on the horizon.

“Until now, the Chinese Yuan has gained 3.7 percent this year, and the country continues to demand some effort to reduce inflation,” Deputy Finance Minister, Zhu Guangyao, said Friday during a meeting.

Zhou Xiaoyan, Deputy Director of the China Bureau of Fair Trade for Imports and Exports, recently said that a new wave of trade protectionism against China was about to rise, citing the U.S. economic downturn and European debt problems.

Friday, the U.S. Department of Commerce announced that it had discovered, in a preliminary hearing, that Chinese companies were dumping steel wheels, offering rights from 110.58 percent to 193.54 percent.

Similarly, in the last few days, a group of U.S. solar cell and panel manufacturers filed a complaint against China, accusing it of illegally dumping the cells and silicon solar cells via massive subsidies.

Finally, last Wednesday, Deputy U.S. Trade Representative Demetrios Marantis also announced that the U.S. had recently investigated more than 200 domestic subsidy programs and would “continue to pressure China and use all the tools at its disposal.”