The USA has repeatedly warned China of possible consequences in the event the latter decided to fix the yuan value
The question of strengthening the Chinese currency, yuan, has surfaced again on the threshold of George W. Bush's visit to China. The Chinese Central Bank announced the country's intention to return to the fixed yuan rate. The US administration has set out its concerns regarding the decision: President Bush said at a recent meeting with Asian journalists that the USA would like China to continue the revaluation of the national currency. The American leader said that he would like to address to China's leader Hu Jintato and say that the market determination of the yuan value would contribute to the favorable development of the global economic system.
It is an open secret that the US administration is interested in the strong yuan not to let cheap Chinese products inundate international markets. The USA has repeatedly warned China of possible consequences in the event the latter decided to establish a fixed rate for the national currency. The White House introduced the 27.5 percent duty on the import of a wide range of Chinese goods in July. China raised the yuan rate by 2.1 percent in July to 8.11 yuans per dollar. It is noteworthy that the Chinese yuan cost 8.28 USD for decades before.
The situation may take a sudden change for the worse nowadays, when the Bank of China is ready to return to its currency traditions. The trade deficit of the USA made up $600 billion as of the end of 2004 - $162 billion of it fell for China's share. This year the losses are likely to increase to $200 billion, according to calculations made by the US government, Bloomberg reports.
The US president believes that China's decision to strengthen the yuan was a step forward: the trade balance between China and the USA is a disturbing issue for the USA, which the American leadership would like to settle once and for good.
Spokespeople for the Bank of China have not released any comments regarding the recent statements from the US president. The Chinese economy is still on the rise: the economic growth in the country made up more than nine percent in 2005. The claimed requirements of the US administration do not fit in the short-term plans of the Chinese Central Bank.
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