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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: Elroy Jetson who wrote (17652)	12/5/2004 9:10:52 AM
From: mishedlo	of 116555

Treasury reiterates call for flexible Chinese currency Friday, December 3, 2004 11:32:21 PM afxpress.com WASHINGTON (AFX) -- The Treasury Department said late Friday that China should move to a flexible exchange rate as soon as possible, but stopped short of issuing a formal finding that Beijing is manipulating the exchange value of the yuan In its semi-annual currency report, the department said that China uses a fixed exchange rate but concluded that such a policy by itself does not meet the statutory definition of currency manipulation "No major trading partner of the United States met the technical requirements for" currency manipulation, the report said "While a number of economies continue to use pegged exchange rates and/or intervene in foreign exchange rate markets, a peg or intervention does not in and of itself satisfy the statutory test," the 17-page report said Since last year, the Bush administration has been publicly urging the Chinese government to move to a more flexible exchange rate regime. China has fixed its currency at roughly 8.3 yuan to the dollar since 1994 American manufacturers complain that the fixed Chinese exchange rate provides an unfair cost advantage to China's exports and is costing thousands of U.S. jobs China's official foreign exchange reserves grew by $67 billion to $471 billion during the first half of 2004, the Treasury Department said.

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