US Congress to legislate on China’s currency manipulation

Washington: Following up on its tough rhetoric a committee of the US House of Representatives has cleared a bill that provides the government power to impose economic sanctions on China and other countries guilty of manipulating their currencies to gain trade advantages.

The House Ways and Means Committee approved the legislation Friday and Democratic leaders promised follow-up action as in a full hearing before the House next week. The bill is intended to protect US jobs against unfair trade competition at a time when the country is reeling under the after effects of a serious recession and is unable to bring down high rates of unemployment.

The bill is expected to win easy passage through the House but is likely to flounder thereafter as the Senate is unlikely to take it up for consideration before the November elections.

The bill's passage to the House from the committee comes on the back of adamant refusal by Beijing to act on its promise to let its currency appreciate meaningfully.

China has mastered the art of getting very active just before impending action against it on a number of issues only to ease off when the immediate threat has passed away.

In a bid to forestall impending action by the Obama administration in declaring it as a currency manipulator Beijing promised in June this year to let its currency appreciate in value to bring it more in line with market realities.  The announcement was also timed to fend off international pressure on China in advance of a Group of 20 nations summit in Toronto.