WASHINGTON - US Treasury Secretary John Snow called Thursday on China to scrap its currency peg linking the yuan to the dollar, which critics say has left the yuan vastly undervalued at the expense of US industry.
"I`d like to see them move to a market system," Snow told senators during a Banking Committee hearing on the US government-sponsored housing loan system.
Snow was responding to criticism from Republican Senator Charles Schumer over President George W. Bush administration`s handling of economic relations with China.
Schumer and fellow Republican Lindsey Graham filed an amendment Wednesday to a State Department funding bill that would slap a 27.5 percent tariff on Chinese imports if Beijing does not revalue its currency within 180 days.
Snow said the US trade deficit with China was "far larger than we`d like to see it", but argued that financial diplomacy with Beijing rather than measures like Schumer`s and Graham`s would prove effective.
"We`re all waiting, Mr. Secretary," Schumer retorted.
The United States and Europe have been pushing China to relax its currency peg against the dollar, arguing that the yuan now enjoys an unfair competitive advantage that is driving many of their exporters to the wall.
But the Chinese government insists that the yuan is not significantly undervalued and that its industries are merely more competitive.
04/07/2005 19:41 GMT