The Disputes Between China And The United States On The RMB Exchange Rate Become More Intensive

About RMB rate The disputes between, U.S.A Senior officials and legislators are increasing pressure on the RMB exchange rate policy. On September 24, the Ways and Means Committee of the House of Representatives of the United States voted to pass a bill aimed at imposing special tariffs on countries that undervalue their exchange rates.

Experts said that the so-called Special Tariff Act was in fact just a U.S Political Games With the mid-term elections approaching, the United States may have more tough behavior towards China, and the issue of intellectual property rights is likely to become another issue for the United States to exert pressure on China after the RMB exchange rate.

It is difficult to legislate the special tariff with great influence

The RMB exchange rate has hit a new high for several consecutive trading days. Even so, it is still difficult to ease the pressure from the United States. On September 24, the Ways and Means Committee of the House of Representatives of the United States voted to pass a bill aimed at imposing special tariffs on countries that undervalue their exchange rates. The bill is expected to be voted in the House of Representatives as early as this week. According to the legislative process of the United States, if the House of Representatives votes to pass, the bill will enter the Senate legislative process.

Sun Huayu, director of the China International Monetary Research Center, said in an interview with the Economic Information Daily that at present, the bill has been supported by 143 members of the House of Representatives, but to be passed by the 435 member House of Representatives, the bill must be supported by more than half, that is, at least 218 members. Even if it is passed by the House of Representatives, the bill will finally take effect, and it still needs to be passed by the Senate, approved by the President and other procedures.

"But if the vote is not held this week, it is certain that the United States will not carry out legislative work on this issue before the mid-term elections on November 2." Sun Huayu said, "Considering that China is the third largest import market of the United States and the fastest growing import market, the United States will be very hurt if China" treats people in its own way ", and I believe that American political leaders will deal with this draft rationally. It is unlikely that this draft legislation will eventually become a formal law."

Tu Xinquan, vice president of the China WTO Research Institute of UIBE, said in an interview with the Economic Information Daily that the bill is likely to be passed in the House of Representatives, but it is likely to be blocked in the Senate. Tu Xinquan said that, generally speaking, the US House of Representatives has an obvious tendency of trade protection. Most of the bills that were unfavorable to China in the past came from the House of Representatives, so the special tariff bill is very likely to be passed in the House of Representatives. However, the Senate is expected to be difficult to pass this test.

Tu Xinquan analyzed that, from the legal perspective of WTO rules, to pass this bill, the United States needs to prove that China undervalues its exchange rate specifically for the purpose of expanding exports. On the one hand, it involves how to judge China's undervalued exchange rate, and on the other hand, it involves how to prove that China's undervalued exchange rate is for the purpose of expanding exports. The Obama administration is also very clear that it is difficult to prove these two aspects. Therefore, it has been reluctant to admit that China is a "currency manipulator" several times before.

Jin Canrong, deputy dean of the School of International Relations of Renmin University of China, also told the Economic Information Daily that even if the US Senate could pass this bill, Obama would weigh the pros and cons and estimated that he would not sign it. Because once this bill is signed, a trade war between China and the United States will break out, which will do no good to the United States.

In fact, there are many opposition voices from the United States. Dozens of American agricultural and commercial organizations jointly urged Congress on the 14th not to pass a bill imposing special tariffs on China's RMB exchange rate. In a letter to Congress, 36 industry organizations, including the U.S. China Trade National Committee, the American Soybean Association and the American Meat Institute, said, "We strongly oppose the use of anti-dumping or countervailing tariff laws to deal with currency issues that have troubled us for years.", The proposal on the RMB exchange rate will "make the United States violate its commitment to WTO rules".

Mei Xinyu, a researcher at the Institute of International Trade and Economic Cooperation of the Ministry of Commerce, said that even though the probability of passing the special bill was extremely low, China should also prepare for the worst. China must prepare corresponding countermeasures to reduce the impact on China's exports once this bill is passed. {page_break}

The United States may be more tough with China to win votes

"Putting pressure on the RMB is just a political game in the United States, not for the sake of the economy at all." Jin Canrong said that the United States currently faces two most important issues, one is the approaching mid-term elections, and the other is the jobless growth of the U.S. economy. In order to relieve the enormous political pressure, American politicians have put intense pressure on China, which is basically to shirk responsibility, win public opinion and obtain votes.

Jin Canrong said that before the mid-term elections in the United States, the United States will certainly continue to exert pressure on the RMB. Even after the mid-term elections, it also depends on the employment situation in the United States. If employment is still not optimistic, the pressure exerted by the United States on China will not be reduced.

Zhao Qingming, a senior researcher of China Construction Bank, said in an interview with the Economic Information Daily that the recent hearing and voting on the RMB exchange rate by the House of Representatives Ways and Means Committee was actually a "farce", which will naturally subside after the end of the US mid-term elections.

"Politically, both parties in the United States want to use the RMB exchange rate issue to raise the visibility rate and build momentum for the mid-term elections; economically, the slow recovery of the United States, the high unemployment rate, and the increased risk of a second dip in the economy are all the background for the proposal and promotion of the draft." Sun Huayu pointed out.

In addition to the stick of "exchange rate manipulator", traditional tools such as anti-dumping and countervailing have also been intensively used by the United States in turn recently. On September 21, the US Department of Commerce made a final affirmative judgment on the "double reverse" of Chinese coated paper exported to the US. In a case not long ago, the US International Trade Court has ruled that there is no basis for the US to carry out a "double anti" investigation against Chinese products. However, the US is still "meddling". In the case of determining that China is a non market economy country, it still uses both anti-dumping and countervailing trade remedies against Chinese products exported to the US, Increase the range of identified dumping and subsidies, and impose high tariffs.

According to the statistics of the Ministry of Commerce, in the steel industry alone, since 2007, the United States has launched a series of "double anti" investigations and trade relief measures against a number of Chinese products, including 15 kinds of products such as standard steel pipes, popular pipes, and steel grating rolled plates. The total amount involved is nearly 7 billion dollars, accounting for 1/3 of China's steel exports to the United States.

Insiders pointed out that the pressure of the United States on China in the field of traditional trade also seems to be increasing. Recently, the United States has also filed several lawsuits against China in WTO. All this shows that at least before the mid-term elections in November, the United States will continue to take more tough actions against China.

Jin Canrong pointed out that it is worth noting that during the United Nations General Assembly, Obama also expressed a lot of dissatisfaction with China's intellectual property issues. The issue of intellectual property rights is likely to become another issue for the United States to put pressure on China following the issue of the RMB exchange rate.

There will be no trade war between China and the United States without breaking

Although the economic and trade disputes between China and the United States will intensify, most experts said that these disputes will not escalate into a trade war between the two countries.

Jin Canrong pointed out that for each other, the Chinese and American markets are a game of stock and increment. Although China's exports to the United States are large in stock, the growth rate of China's exports to the United States has begun to slow from the perspective of growth. For American exports, China is an expanding market at an annual rate of 30%. According to statistics, from 2001 to 2007, the overall export of the United States increased by 30%, and the export to China increased by 100%. "It can be said that the United States has just begun to taste the sweetness of the Chinese market and will not give up easily."

Tu Xinquan also said that it is impossible to trigger a trade war between China and the United States. Dialogue is the way to resolve disputes. It is very likely that China and the United States will maintain the trend of "fighting without breaking" with "thunder and little rain". If the United States repeatedly violates the WTO rules, China will also actively appeal to the international organization level to resolve disputes.

Peter Coy, columnist of Business Week, published a commentary on September 24, saying that if the United States violates the WTO regulations to force the appreciation of the RMB, it may bring multiple risks to itself, including the trade war between China and the United States. China is careful to take measures within the framework of WTO, and the United States should also follow suit and not run against the public opinion. If the United States punishes China by violating the WTO regulations, the United States will face multiple risks, including trade wars, loss of support from other countries, and destruction of the free trade system that has been hard established for decades.

Li Yushi, Vice President of the Institute of International Trade and Economic Cooperation of the Ministry of Commerce, said in an interview that the economic structure and development status of China and the United States have made each other's economic dependence and constraints unprecedented. If Americans do not import goods from China, they will also have to import goods from other emerging economies. Compared with other emerging economies, the development level of China's manufacturing industry has obvious advantages. More and more Chinese enterprises are providing goods with high cost performance. It is not good for the United States to abandon such a choice. What's more, the world economy is no longer the era when the United States alone is dominant.

Experts said that China US relations have entered a very mature stage. Although there are conflicts of interest and friction points, the bilateral economic and trade pattern will not change significantly in 2010. China's "peaceful rise" in the era of globalization is a process of continuous integration with global interests and goals, and a complex interactive process of continuous adaptation and adjustment with trade partners such as the United States. The positive interaction in the economic and trade field between China and the United States is not only beneficial to the two countries, but also contributes to the development of the world.