Congress - without much supporting evidence of economic expertise - has decided it needs to mess with the Chinese economy. After all, it's barely growing at 12%. So we Americans should decide what their currency is worth.
The administration unleashed its admonition as Paulson visited China once again, pursuing his favored course -- high-level talks with Chinese counterparts on a range of trade issues. Paulson has maintained that this Strategic Economic Dialogue remains the best channel for persuading China to allow its currency to float freely and to respect the norms of international trade.Danger here, methinks. China is already pursuing a vigorous foreign policy program in the Mideast to secure energy, they have a growing naval presence and just incidentally hold a mountain of US debt. We're not going to push those 1.3B folks around like Grenada. The leadership in China has a short fuse when it comes to outside interference. Like the administration, Congress seems to me to be headed for biting off far more than they can masticate.
Since the dialogue was launched in December to fanfare in Beijing, however, the main achievements have been minor deals, such as additional airline routes and promises of more talk. Growing numbers of lawmakers from both parties have joined a chorus of aggrieved manufacturers and labor unions, who maintain that China artificially depresses the value of the yuan to keep its goods unfairly cheap on world markets, costing American jobs. [More]