China's currency manipulation could hurt economic recovery

Greetings!  I'm Nico Trimoff, manager of transcription and accessibility services at www.sterlingcreations.ca.
Have you ever wondered what China is up to with regard to the stock market?  Well, here is your chance and we thank Gaston Bedard for submitting this to us.
It's a very interesting article.  Thanks much Gaston.
Enjoy your day.

 

+++++++++++++++

China's currency manipulation could hurt economic recovery:
A reader's contribution

 

Friday, October 8, 2010
Lee-Anne Goodman, The Canadian Press

 

WASHINGTON - The threat of currency wars torpedoing a fragile global
economic recovery dominated International Monetary Fund meetings on Friday,
with Canada's Jim Flaherty saying he had no hope of an easy consensus during
a weekend economic confab.

 

"I certainly don't anticipate there's going to be any unanimous agreement
here in Washington this weekend on currencies, flexible currencies and how
much they should move," the finance minister told a news conference with
members of the so-called Commonwealth Secretariat.

 

"I do think that there will be a clear resolution on behalf of those
countries that have currencies that trade freely... that there are
consequences that are bad for world economic recovery, for a world economic
recovery that is fragile, by other countries maintaining relative
inflexibility in their currencies."

 

Flaherty was weighing in on the economic dust-up being fought primarily
between the U.S. and China as the Obama administration continued to put
pressure on the Chinese to allow their currency to rise in value against the
U.S. dollar. The goal is to boost American exports.

 

U.S. Treasury Secretary Timothy Geithner said Friday that China was
endangering a global economic recovery by refusing to allow the yuan to
appreciate.

 

He called on the IMF to get tough by monitoring the economic actions of its
member countries, arguing that taking on a more stringent watchdog role
could be crucial in preventing another global economic meltdown.

 

Japan, Brazil and South Korea have also taken steps recently to keep their
currencies weaker in an effort to make their exports more attractive.

 

Finance ministers from around the world are in Washington this weekend for
the annual meetings of the 187-country IMF and its sister lending
organization, the World Bank.

 

Flaherty pointed out that a currency war among major economies will not
benefit China in the long run.

 

"China needs western economies to sell its goods," he said. "It is not in
their interest to have currency wars."

 

He also chided China for breaking a promise it made at the G20 summit in
Toronto earlier this year that it was "committed to allowing greater
flexibility" of the yuan.

 

In June, China announced it would allow more flexibility into its currency
system, but since then the yuan has risen by just two per cent against the
U.S. dollar. American manufacturers say the Chinese currency is undervalued
by as much as 40 per cent and is making it impossible for them to compete.

 

"We are at the stage that we have a recovery that is modest and fragile,"
Flaherty said, adding now was not the time for China to be manipulating its
currency.

 

The head of the International Monetary Fund issued the same plea to global
finance ministers, urging them to stop toying with their currencies for
their own economic gain and instead join forces to commit to a worldwide
economic recovery.

 

"There is clearly the idea beginning to circulate that currencies can be
used as a policy weapon," Dominique Strauss-Kahn said. "Translated into
action, such an idea would represent a very serious risk to the global
recovery."

 

The world is struggling to emerge from the worst recession since the end of
the Second World War, he added.

 

"We are gathering at a pivotal moment facing a very uncertain future,"
Strauss-Kahn told the delegates. "Growth is coming back but we all know that
it is fragile and uneven."

 

China, however, is refusing to swiftly free up its currency, and Chinese
officials in Washington this weekend remain insistent that their plans to
slowly revalue the yuan is the best approach.

 

"China will move the exchange rate gradually," Zhou Xiaochuan, head of
China's central bank, said during a panel discussion. "We will do it in a
gradual way rather than shock therapy."

 

But Flaherty warned of the consequences if China doesn't act soon, saying
it's integral to avoid actions which "distort trading relationships and
invite retaliation."

 

The U.S. is attempting to pass trade sanctions against China in Congress
that would allow American companies to seek import duties on Chinese
exporters using an artificially weak currency. The measure has passed the
House of Representatives but still has to get through the Senate.

 

China has assailed those efforts, calling them protectionist.

 

The Canadian Press

 

If you would like to learn more about us and the services we offer, then please visit www.sterlingcreations.ca
If you would like to keep abreast of some of the most important happenings affecting your lives today, then please visit http://www.sterlingcreationsdesk.blogspot.com.  There you will get the latest news roundups on such topics as:
Stress, anxiety, and depression. News for retirees, seniors, and aging baby boomers.  Security tips for home computer users.  Home business opportunities, Internet business opportunities, small business opportunities, business opportunities in Asia.  You will also learn how to obtain tremendous personal and financial satisfaction by selling your knowledge and experience.