China says U.S. legislation breaks WTO rules

China says US Breaks WTO Rules.

China criticized a U.S. bill approved by the House of Representatives designed to persuade Beijing to quicken the rise of the yuan by saying that the measure violates existing rules of the World Trade Organization (WTO).

Beijing has not allowed its currency to rise as fast as other economies hoped as they look for exports to carry them back to recovery, raising apprehension that the Chinese government will purposely weaken the yuan to take the advantage.

The House measure permits the U.S. Department of Commerce to consider “fundamentally undervalued currencies” as an illegal export subsidy so that U.S. businesses can ask for countervailing duty to adjust to China’s price edge.

“Starting a countervailing investigation in the name of exchange rate does not conform with relevant WTO rules,” said Yao Jian, spokesman for China’s commerce ministry.
China’s reaction is considerably muted compared with other statements it issued last year about U.S. weapons sales to Taiwan when China suspended military contacts with the U.S.

“I don’t think China will have any dramatic reaction to this bill’s passing,” said Jin Canrong, professor of international relations at Beijing’s Renmin University. “China wants to preserve the stability of overall relations.”

The Senate would need to approve the bill before being endorsed to President Barack Obama to be signed into law.

Beijing’s stance against the pending Congressional bill was echoed by the American Chamber of Commerce in China, saying that “if enacted into law, the chamber does not believe the bill will be effective in achieving its objectives and would fail to create significant U.S. job growth.”

Posted by George Daniels on Friday October 01 2010, 2:46 AM EST. All trademarks acknowledged. Filed under Featured News, Finance. Comments and Trackbacks closed. Follow responses: RSS 2.0