U.S. lawmakers from both parties are stepping up their criticism of China, which they say is manipulating its currency to give exporters an unfair edge. VOA's Stephanie Ho reports from Washington.
Democratic Congressman Tim Ryan is one of the sponsors of the Fair Currency Act of 2007, he says, is intended to punish countries like China, that, he says, control their currencies to obtain a trade advantage.
At a news conference in Washington Wednesday, Ryan accused Beijing of intentionally manipulating the remnimbi.
"It will define currency misalignment as a prohibited export subsidy," he said. "We don't allow people to subsidize businesses in other countries and ship their goods over here. The fact of the matter is, if you misalign your currency, it has the same effect as a subsidy, and we want that to apply here in the United States, which would allow for a counter-vailing duty."
Critics in the United States accuse China of artificially keeping its currency undervalued, which makes Chinese products cheaper on the world market. At the same time, many U.S. lawmakers are upset at the massive U.S. trade deficit with China, which last year reached a record $232 billion dollars.
The Fair Currency Act introduced by a group of congressmen from both parties is intended to address this problem.
Republican congressman, Duncan Hunter, who is one of the leading sponsors, accused China of cheating on trade. He said the effect is that Chinese products are 40 percent less expensive in the world market than American goods.
He gave an example of what that would mean for an American product versus a Chinese product.
"They're both $100, the Chinese government, in a practical way, walks by and says we just marked down our product to $60," he explained. "It's now cheaper than the American product. Why don't you buy it instead of the American product? That is sweeping the American product off the shelves around the world."
He also raised concerns that Beijing is using money it earns from surplus trade to buy military equipment.
"While China is cheating on trade, they're using some of those billions to buy ships, planes and missiles," he explained. "Some of the military equipment that China is buying is being aimed back at the United States, or has the particular classification that means it only could have been purchased to confront the United States Navy."
Hunter said Chinese military purchases include four sophisticated destroyers that can be used against aircraft carriers, as well as medium and short-range ballistic missiles.
The legislation he and others propose has a backing of a broad coalition of business associations, companies and labor unions.
For its part, China denies it is manipulating its currency and has allowed the remnimbi to revalue, but only within tightly controlled bands.
