Legislation Introduced to End Currency Manipulation by China

BEIJING (Reuters) - China rejected claims it has manipulated yuan exchange rate policies to tilt trade flows against the United States, saying on Thursday that proposed legislation before the U.S. Congress could stoke protectionism.
Chinese Foreign Ministry spokesman Ma Zhaoxu made the statement in response to Congressional moves to curb China's exports unless Beijing realigns its exchange rate to make those exports more costly, which would help narrow the two countries' trade gap.

The legislation would require the government to impose anti-dumping and countervailing duties on imports from a country whose currency has been "misaligned" for a long time.

The Chinese Foreign Ministry has no direct say in trade and currency policy, and usually confines itself to general statements. Spokesman Ma stayed to that course.

"The Chinese government has never engaged in so-called manipulation of currency exchange rates to obtain international trade benefits," Ma told a regular news conference.

"Making groundless accusations over exchange rates will only encourage U.S. trade protectionism, and this would be of no help in really resolving the problems."

The bill appears to have slim chance of becoming law anytime soon.

Sen. Debbie Stabenow, one of the legislators who introduced the bill on Wednesday, said it was uncertain when or how the legislation would advance since she had no commitments from Senate leaders to move it forward.

U.S. lawmakers have complained that China has manipulated its currency, but President Barack Obama's Treasury Department declined to formally label China as a currency manipulator. Continued...