ASSESSMENTS

China, U.S.: The Exchange-Rate Dispute Continues

Jun 24, 2010 | 20:12 GMT

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Summary

Though he called increased flexibility of the exchange rate of the yuan a positive step, U.S. President Barack Obama said it remains to be seen whether the change is significant. The statement follows the latest ramping up of debate over Chinese currency policy. While China fears a rising exchange rate will harm its export sector and thus exacerbate social unrest, U.S. politicians fear not appearing tough on China ahead of midterm Congressional elections, given unemployment concerns and China's flagrant currency manipulation. The upcoming G-20 meeting and China's actions afterward will be critical in determining whether Washington will increase pressure on China or allow it more room to pursue its reforms cautiously.

The upcoming G-20 meeting and China's actions afterward will be critical in determining whether Washington will increase the economic heat on China....

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