Circuits Assembly Online Magazine - NAM President Calls out Bush Administration on China Currency Games

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WASHINGTON -- The National Association of Manufacturers expressed disappointment today with the Treasury Department's failure to cite China for currency manipulation in its semiannual report to Congress, but noted Treasury's statement that time is running out for China to act.

NAM president John Engler released a statement saying, "We have called for Treasury to cite China for currency manipulation in its report, and of course we are disappointed that did not happen."

But Engler pointed to a statement by Snow during a Treasury news conference this afternoon warning China that, "If current trends continue without substantial alteration, China's policies will likely meet the statute's technical requirements for designation" as a currency manipulator.

"The tougher tone of today's Treasury report is a positive development. This marks the end of a period of quiet diplomacy and technical assistance," Engler observed. "The language is about as hard-hitting as it can be without actually citing China. But, getting to the one-yard line doesn't put points on the board.

"Rather than buy U.S. goods and services, China has built its currency reserves by buying $640 billion, including an astonishing $200 billion in the last year alone. This keeps China's exports cheap and maintains its artificial trade advantage. If this isn't currency manipulation, then what else would ever qualify?" Engler asked.

"We want to see a healthy, sustainable trading relationship with China, and a market-determined exchange rate is an essential ingredient," explained Engler. "If China hasn't taken significant action by October, the NAM will expect Treasury to move beyond citation in its next report and initiate action in the International Monetary Fund and, possibly, in the World Trade Organization as well.

"While we will continue working closely with the Administration on this issue, the NAM also must continue its review of possible Congressional approaches to building pressure for an end to currency manipulation, provided these approaches fit within the rules-based trading system," Engler said.

The talks came on the eve of another industry led attack on the Bush Administration's stance on China's currency. On Wednesday, IPC members will lobby their Congressional representatives on the same topic.