currency manipulation

Treasury Delays China Currency ManipulationReport

The U.S. Treasury has delayed a currency manipulation report on China according to the New York Times. The report was due out mid-April.

For now, the United States is setting aside the most potentially divisive issue, deferring a decision on whether to accuse China of manipulating its currency, the renminbi, until well after Mr. Hu’s visit, according to a senior administration official. That decision, the official said, reflects a judgment that threatening China is not the best way to persuade it to allow the renminbi to appreciate against the dollar.

Many economists expect China to act on its own to loosen the tight link between the renminbi and the dollar — a policy that keeps the currency’s value depressed and makes Chinese exports more competitive in global markets.

China CEOs are all for a Floating Yuan!

This is an astounding headline. According to Bloomberg, Chinese Business Executives are meeting right now with President Obama and are for increasing the value of Chinese currency in relation to the U.S. dollar.

Chinese executives are joining U.S. President Barack Obama in backing a stronger yuan, even as Premier Wen Jiabao says the currency isn’t undervalued.

Yang Yuanqing, chief executive officer of Beijing-based computer maker Lenovo Group Ltd., said gains would boost consumers’ purchasing power. Qin Xiao, chairman of China Merchants Bank Co., said an end to the yuan’s 20-month peg to the dollar would let lenders set market-based interest rates. Chen Daifu, chairman of Hunan Lengshuijiang Iron & Steel Group Co., said a stronger currency would cut import costs.

China Killed IMF Report on Their Currency Manipulation

Buried in the article IMF warns wealth nations of debt is this gem:

The I.M.F.’s staff concluded in a report last summer that the renminbi was “substantially undervalued, ” and that this was contributing to China’s large trade surpluses in recent years. But China has blocked the release of that report, a prerogative of the I.M.F.’s member countries, although most allow the release of the I.M.F. staff’s reports on their economies.

China didn't like the IMF call out their currency manipulation so they bury the report? Gets even better. Be prepared for a propaganda war due to a statistical anomaly, (really, who does trust official Chinese statistics on their economy?), China will report a trade deficit:

Paul Krugman Takes on China's Currency Manipulation

Anyone reading this site knows we have talked in depth about China's currency manipulation. Now Paul Krugman takes it on, which is good news due to the devastating impact currency manipulation has on the U.S. economy, especially jobs and manufacturing.

Widespread complaints that China was manipulating its currency — selling renminbi and buying foreign currencies, so as to keep the renminbi weak and China’s exports artificially competitive — began around 2003. At that point China was adding about $10 billion a month to its reserves, and in 2003 it ran an overall surplus on its current account — a broad measure of the trade balance — of $46 billion.

Goldman Sachs predicts 5% Yuan evaluation increase

Goldman Sachs is predicting China will raise by 5% it's currency. I think we've seen these reports before, but because China's currency manipulation is such a major factor in the U.S. trade deficit, this is worth a read.

Goldman Sachs Group Inc. Chief Economist Jim O’Neill said China may be poised to let its currency strengthen as much as 5 percent to slow the world’s fastest growing major economy.

“I have a strong opinion that they’re close to moving the exchange rate,” O’Neill said in a telephone interview from London after China’s central bank told lenders on Feb. 12 to set aside larger reserves. “Something’s brewing. It could happen anytime.”

Is Obama going to grow a pair & demand China float their currency?

Is this more great sounding rhetoric or is Obama going to get serious about China and their currency manipulation?

The administration has told Chinese officials that currency policy will be high on its agenda this year for economic talks with China, a senior official said on Wednesday. The White House is also weighing whether to designate China as a country that manipulates its currency, when the Treasury Department issues its semiannual report on foreign currencies in April.

President Obama signaled the tougher line on Wednesday, telling Democratic senators that the United States needed “to make sure our goods are not artificially inflated in price and their goods are not artificially deflated in price; that puts us at a huge competitive disadvantage.”

China May Re-Evaluate Yuan 5%

This might be a tad bit of good news for U.S. manufacturing. Bloomberg is reporting China may allow Yuan to increase 5% in a one time move.

The Chinese government may allow the yuan to have “a bigger one-off move than people talk about, at least 5 percent, maybe more,” O’Neill said in an interview today at the London School of Economics. “They may also consider having a wide band to let it move more frequently on the daily basis to stop speculative players.”

China’s economy rebounded stronger than anticipated in the fourth quarter, and the inflation rate accelerated to a 13-month high of 1.9 percent in December, igniting speculation the government will abandon the yuan peg to avoid the economy from overheating. China has kept a lid on its currency since July 2008 after it strengthened 21 percent against the dollar over the previous three years.

China Exports increase 17.7% in December 2009

The headlines are all on fire with China exports increase 17.7% in a year.

China’s exports surged in December and imports rose to a record in a stronger-than-forecast trade rebound that may lessen the case for governments to sustain stimulus programs this year.

Exports climbed 17.7 percent from a year earlier, the first increase in 14 months, and imports jumped 55.9 percent, the customs bureau said on its Web site yesterday. Year-on-year comparisons are affected by declines from late 2008 as the global credit crisis deepened.

But what is hilarious is the assumption China would somehow re-evaluate their currency due to these figures.

Digging deeper, we see that China has increased imports 55.9%. Raw commodities are the thing that stands out on imports:

Geithner Backs Off China currency manipulation

Surprise, surprise. Treasury Secretary Geithner backed off the well known and well documented currency manipulation by China. Anyone believe that's because China now owns the United States?

Treasury Secretary Timothy Geithner pushed Group of Seven officials to soften criticism of China last month after his accusation that the nation was “manipulating” the yuan strained ties with the U.S.’s second- biggest trading partner, said a person briefed on the matter.

G-7 finance ministers and central bankers on Feb. 14 welcomed “China’s fiscal measures and continued commitment to move to a more flexible exchange rate.” By contrast, the group in April 2008 pressed for “accelerated appreciation” of the yuan.

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