In RMB exchange rate, the U.S. finds a political weapon
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Zbigniew Brzezinski once said America needs an enemy. In the previous months, assaults from the politicians of Capitol Hill on the RMB exchange rate reached its pinnacle. The case did not merely happen by accident.
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| Zhang Guoqing |
National politics became the top concern when the U.S. attacked China on its RMB exchange rate. The buzz on the issue was silenced no sooner than the outbreak of the financial crisis in the U.S. As many Americans realized the crisis was triggered by the greediness of capitalists and spread uncontrollably under loose supervision, people from the White House to Wall Street started to realize, at the beginning of President Barack Obama's tenure, the problem was caused by their own.
Unfortunately, Obama's economic stimulus plan hasn't helped much as unemployment keeps rising and the economy remains sluggish. To curb his declining approval ratings and relieve domestic pressure, Obama challenged Sino-American relations by blaming China for manipulating the RMB exchange rate.
The abrupt change from Obama exhilarated anti-China congressmen and the lobbies of fading industries, which believe the RMB exchange rate is the main cause of the US's economic downtown.
Politicians and businessmen from manufacturing and export sectors, to be revitalized under Obama's employment policies, find their guiding star. Unwilling to reckon their incompetent ability, they try to find a quick solution to solve thorny problems brought by the economic downturn. Putting pressure on the yuan's appreciation and competing with Chinese products have become political weapons with which to lobby Congress. If China would yield to the threats, the U.S. will grab more market share in both countries' markets.
Therefore, the financial issue becomes a political problem that galvanized hostility between the two countries. According to Chen Mingde, Chinese minister of commerce, the RMB exchange rate should be China's sovereign right and cannot be discussed between the two countries. To bargain the issue with China, the U.S. interfered with China's internal affairs.
The International Monetary Fund said no evidence has yet been found to show the RMB is severely undervalued. The RMB performance in the past five years hardly proves it has been severely undervalued. The undervalued RMB is nothing but an excuse of America's protectionism.
The Obama government should be rational when treating Sino-American relations. It should focus on stimulating its domestic economy, spurring domestic demand and finding the economic growth engine, but not on how to ruin good Sino-American relations.
The author is a columnist with China.org.cn. For more information please visit:
http://www.china.org.cn/opinion/node_7077605.htm
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