China is getting ever closer to trade war with Washington, experts say. The United States is increasing pressure on China’s monetary policy because the weak yuan is making China’s exports unfairly cheap. Beijing, meanwhile, is finding reasons not to strengthen the yuan.
The growth of the yuan would be a disaster for China’s exporters, said the country’s Council for the Promotion of International Trade, in response to U.S. demands for Beijing to slacken the exchange rate of China’s currency.
The United States had already begun an active attack on the yuan last year: This was one of the main issues on U.S. president Barack Obama’s agenda during a visit to Beijing in November 2009. At that time, several U.S. congressmen appealed to the U.S. Trade Ministry to conduct an investigation into the matter of China’s currency manipulation. An undervalued yuan makes China's exports unfairly cheap, they say. The IMF and several Asian countries have already voiced support for changes in China’s exchange rate policy.
The Council for the Promotion of International Trade is preparing to back up its views with numerical evidence: In the near future, the Council will run stress tests in 1,000 companies across 12 industries.
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