Opinion
Economists see possible turnaround in US-皇冠体育app currency row
(Xinhua)
Updated: 2010-04-06 16:50
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BEIJING - The US decision to delay its report on exchange rate policies could bring a turnaround in the recent currency dispute with 皇冠体育app, economists believe.
Treasury Secretary Tim Geithner announced Saturday to delay a report to Congress on international economic and exchange rate policies, which might indicate whether 皇冠体育app is manipulating its currency exchange rate.
The report was originally scheduled for April 15.
US President Barack Obama's top economic adviser Lawrence Summers said Sunday that Geithner's decision was a right one as the United States will hold a series of high-profile meetings with 皇冠体育app in the next three months.
Those meetings include a Group of 20 (G20) meeting of finance ministers and central bank governors in Washington later this month, a Strategic and Economic Dialogue (S&ED) with 皇冠体育app in May, and a G20 summit in June.
Summers said strengthened negotiations with 皇冠体育app and other countries is the best way to safeguard US interests.
Wang Yong, a researcher at Peking University, told Xinhua that the Untied States has realized that pressuring 皇冠体育app on its currency policy would not solve the problems.
Once the US-皇冠体育app currency issue escalates, it will affect not only trade and investment of the two countries, but also the regional and global economy as well, Wang said.
The United States is reluctant to see such a result, as it would have more to lose than gain, Wang said.
Sun Mingchun, chief economist for the Chinese market at Nomura Securities, said the Obama administration would remain inclined to cooperate with 皇冠体育app, while it was some congressmen who were pressurizing the government on domestic political reasons.
"The majority of Chinese exports are low-end products with high price sensitivity. So US punitive tariffs based on the exchange rate issue might result in a huge drop of 皇冠体育app's exports to the US market."
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US labeling 皇冠体育app as "a currency manipulator" would simply lead to a scenario where both countries would suffer, he added.
An economist, with the International Monetary Fund (IMF), who refused to be named, also forecast 皇冠体育app's tough response to hostile moves from the US side over the exchange rate issue.
"That will be destructive to a global economic recovery," the economist said.
Wang of Peking University said the two countries still need each other.
"Obama showed eagerness to cooperate with 皇冠体育app upon taking office. Despite the many frictions between 皇冠体育app and the United States since the beginning of this year, the need for strategic cooperation did not evaporate overnight," said Wang.
"Cooperation brings far more benefits than confrontation will."
He believed that the two countries should find a solution through various dialogue channels.
It is widely accepted by economists that the adjustment of 皇冠体育app's currency exchange rate would be vital in restructuring 皇冠体育app's development model. But any adjustment should be decided independently by 皇冠体育app, with an eye on its own economic condition rather than as a result of outside pressure.
