Geithner Accuses China Of "Manipulating" Its Currency

President Barack Obama's nominee for Treasury secretary accused China on Thursday of "manipulating" its currency, a sharp rhetorical break from the Bush administration's approach to Beijing's controversial exchange-rate policy.

Timothy Geithner's use of the term signaled an escalation in the war of words -- if not necessarily of actions -- over Beijing's practice of keeping the yuan artificially weak against the dollar. Many U.S. manufacturers, unions and lawmakers charge that Beijing tinkers with its currency to give Chinese companies an edge over foreign competitors.

Read the whole story here.

Comments

[luke150]

I hope I am wrong, I just don't have a good feeling about Geithner. It's not only the character issues or lack of communication skills.

[Harrier]

The guy is about 20 years late. My guess is tomorrow he will discover there is a real estate problem

[FairTalk]

Well, Geithner may have economic experience, but I question his motives in acusing China. As for Obama, he should seek to work with China, not against China.

[munki]

You are absolutely right...
In this economy... we have to work together to get out of this Global recession.

[RedneckDem]

Uh... China would, and will, throw us under the bus any time if it in any way benefitted them. The sooner you get that thru your head the better...

[luke150]

And since they are our creditor, you don't aggravate them, but you try to work with them. Totally dumb statement from Geithner.

[KillTheMessenger]

So now he did it. He got an immune response from China. And that is all it is. China will do what is best for China, no matter how often we kick their shin.

[jeffp26]

The subtitle to this article should read:

While Eviscerating the US Dollar

[ReasonIsMyReligion]

The soaring price of gold, the sinking dollar, and the rush to print money to throw at the banks, would suggest we are doing similar.

[jerrypl]

Geithner--you FINALLY said something right!!!! Finally. It took all this time, and now, you have made one right statement, which you have know for years---China is manipulating their currency. DUH!!!!!!

http://eye-on-washington.blogspot.com

[KillTheMessenger]

In politics, especially when it involves the next superpower, it is not exactly wise to say what you think will gain you the support of the Rush listeners. It would be better to say things that will let you see your Chinese counterpart in the eye without blushing.

[munki]

If we do not owe China $586billion (as I was told in 12/08)...
Things will be different...
So... it is catch 22...

[Carolab]

Pot meet kettle.

[nogimmicks]

As if Geithner (or the TS before him) never manipulate the dollar. On a related topic, appointing Geithner to watch the public money interests was outrageous and ill advised. A tax-evader and a student of Rubin and Summers partially responsible for the present crisis to become the US Treasury Secretary????

[DLBSR]

Honestly, nobody is advocating going to war with China over manipulating their currency. On the other hand, we simply cannot ignore the fact that manipulating Chineses currency has been detrimental to the US economy, an economy that is quickly tanking. Administrations from Reagan to GW Bush have provided plenty of lip service, with a fair amout of smooching from the Chinese thrown in, with no real abatement action. Perhaps a robust US economy with an annual growth rate of 4%.> would make the argument that this is not a serious issue more plausable. Chinese apologists are only aggravating the problem. Some say that China is not the only country to manipulate it's currency to provide an unfair trade advantage to it's industry and while that is very true, China is the holder of more US debt than any other country and by default is our largest problem because the lions share of that debt is directly attributable to currency manipulation. Let's find solutions, not more Chinese apologists.

[KillTheMessenger]

Here is a problem: everybody is manipulating their currency. That's how central banks work and we have not found another way of keeping money and value creation in balance. Just a fact, no apology.

The Chinese are not responsible for the difference between their growth and ours. They can't let their economy go into a a recession so we can keep up. And of we were them, we wouldn't do it, either. Just facts, no apology.

That they are holding all this debt is because we have been issuing IOUs for decades instead of getting our house in order. Another fact, not an apology.

So what are we going to do? How about buying back those IOUs, one by one?

[DuganS1]

That's true. What's also true is that if the yuan would increase in value say.. 10-20%, it would make our trade deficit with China bigger, not smaller, as we'd still buy their products - they'd just be more expensive. China is quite a ways from having much demand for US made goods. The strategy so far has been for US companies with operations in China to produce for the domestic Chinese market as well as for import to the US. I think this trend will continue for some time.

[munki]

This accusation never stop... I heard it when I was working in Japan, then Korea... now China... who is next? Perhaps, we should have a guideline that to be adopted in UN or whatever, so all other upcoming or rising countries will have an understanding upfront...

Really... perhaps, next will be Vietnam? Thailand? and list goes on.... OOOPs... India before Vietnam...
Development countries do manipulate their currencies until they stabilizes its economy and currency...
I do agree... something needs to be done, but instead of accusing... talk to China or whatever the country may be... and work it out... You just got in in Treasury Department...

Honestly... protocol... perhaps it will avoid bitter taste in mouth... I heard so much from both... when I used to live in Japan... We constantly accused of Japan... that is something we may have to learn to deal with Asian countries... Articulate reasoning and working it out a time program... that will work for both side... NOT on your day 1...

If we were accused of the same... I bet we all will be angry... I just like peace and unity... WORK OUT...

[mamacat]

I was recently shopping for tires for my American car. The salesman assumed that I wanted the cheapest tires, which were Chinese. For only $15 more per tire, I was able to buy Goodyear Eagles, a better tire, made in this country. If 300 million American consumers buy American when it is practical, it will put a lot of people back to work in a country that believes in things like Social Security, retirement programs, unemployment programs, safety laws, anti-pollution laws, overtime laws, and child labor laws. There are many reasons why making goods in third world countries is cheaper than making them here.

[KillTheMessenger]

The salesman assumes that you want the cheapest tires because if he offers the American made ones first and then the customers see the cheap Chinese ones, many of them will think he was trying to screw them. In all likelihood he makes the same or more on the Chinese tires, anyway. I would think it's more.

The Chinese believe in those things, too, by the way. Maybe more so than we do. But unlike us they can't afford them, yet. We can afford them but instead are spending our money on an unnecessary war.

And those poor exploited Chinese children can be found at Harvard and Stanford where they are getting their PhDs in hard sciences.

[mamacat]

China is not the only country that manipulates its currency to give its industries a trade advantage, it's only the largest country to do so.

[DLBSR]

The sooner Americans understand and accept the fact that our imbalances with China are not solely a product of the democrats or republicans, but rather us, the sooner we can begin correcting this issue and improving our economy. WE are the problem. Yes, that's right....you and me are the problem. The government did not send storm troopers to your or my house and force you and me to drive to our favorite shopping center and purchase chinese made products. None of us received tax credits for purchasing our foreign made junk. We must stop blaming others for the problems created by our own greed and ignorance. It's so easy and popular to blame Bush or Clinton, or Carter or Reagan, and yes soon we will be blaming Obama. Look inward and you will see the problem and find real solutions to our problems. We must put aside the partisan and discordant bickering and focus on the fact that we are the masters of our destiny.

[DLBSR]

China's growth is largely a credit to our substantial and critical decline as an economic power. Sure, they are tinkering with their currency to our detriment. Most Americans have been aware of this for many years. Sadly, most Americans simply do not care so long as they can continue to purchase the low cost non-essential junk at Walmart. The Chinese have a long term strategy they have been following since the Nixon Administration and that is to destroy this country, using our own greed as a weapon. China is building a modern blue-water navy, modernizing their conventional forces, seeking to add long-range strategic bombers to their modern fighter and logisical air wings, building ultra-modern ballistic missle submarines, and adding to their already formidable and increasingly accurrate land based ICBM capabilities with American dollars and technology. Oh, by the way....we owe them trillions of dollars. They are going to call that debt very soon. Remember, you heard it here. Still, most Americans simply do not care.