A U.S. bill aimed at penalising China for not letting the yuan rise faster could seriously affect bilateral ties, warns the Chinese government.
U.S. lawmakers on Wednesday overwhelmingly approved a bill to punish China for what they branded its unfairly undervalued currency, blaming the weak yuan for killing U.S. jobs.
The bill, which many analysts say is unlikely to become law, intends to pressure Beijing to let its currency appreciate faster by branding it in violation of world trade rules, notes the China Post.
To ease U.S. concerns, China has strengthened the yuan gradually in recent weeks. The currency was up 1.6% against the dollar during September.
Business groups that oppose the legislation fear the bill could hurt rather help U.S. exports to China, if the Chinese government ends up retaliating by restricting imports from the U.S. But U.S. Treasury Secretary Timothy F. Geithner says he is confident tensions over the yuan won’t lead to escalating trade sanctions or lead to a broader global currency conflict.
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