People’s Bank of ChinaPeople’s Bank of China on the U.S. Senate’s Voting to Pass Currency Exchange Rate Oversight Reform Act of 2011On October 11， the U.S. Senate voted to pass the Currency Exchange Rate Oversight Reform Act of 2011. We express our firm opposition to this move.In recent years， the RMB exchange rate regime reform has been accelerated and produced remarkable outcome， with the RMB exchange rate moving towards an adaptive and equilibrium level， thus contributing to global economic and financial stability. In total disregard of the facts， the U.S. Senate has found fault with the RMB exchange rate， and used it as an excuse for the deep-rooted domestic problems. This act of politicizing economic issues will in no way help solve the domestic problems of the U.S. Rather， it will undermine the bilateral economic and trade relations between China and U.S. and pose threat to recovery and growth of global economy.People’s Bank of China on the U.S. Senate’s Voting to Consider Currency Exchange Rate Oversight Reform Act of 2011 on Oct 3We are deeply regretted that the U.S. Senate voted to proceed to consideration of Currency Exchange Rate Oversight Reform Act of 2011 on Oct 3.Global imbalance is a longstanding issue resulting from multiple factors. The trade imbalance between China and the U.S. is attributable to a range of relevant factors， rather than RMB exchange rate alone， which include different investment and trade structures， diverging savings and consumption patterns， different division of labor in global industrial chain of the two countries， and the drawback in the current international monetary system.Over recent years， China has been committed to economic restructuring， reducing current account surplus and promoting a more balanced BOP account. To boost domestic demand， China has adopted a series of measures， including encouraging consumption， developing the service sector， and enhancing social security net， medical service， housing and education. These efforts successfully improved China’s economic structure and helped China move towards a more balanced BOP account. As a result， China’s current account surplus as a percentage of GDP has been falling steadily， dropping from 10.1 percent in 2007 to 5.2 percent in 2009 and 2010， and further to 2.8 percent in the first half of 2011. Meanwhile， the RMB exchange rate has become significantly more flexible since China furthered the RMB exchange rate regime reform last year. In fact， RMB has appreciated remarkably in real terms and is moving closer to its equilibrium level taking domestic inflation into account. Historical evidence shows that the managed floating exchange rate regime based on market supply and demand with reference to a basket of currencies is in line with China’s realities， and is conducive to international economic and financial stability and development. We will continue to progressively promote the reform of the RMB exchange rate regime， and make the exchange rate more flexible in a self-initiated， gradual and controllable manner.In the context of a sluggish global economy and weak confidence， an external environment where all countries work together to tide over difficulties through concerted efforts is of critical importance. At this juncture， the vote by the U.S. Senate cannot help address the problems of insufficient savings， trade deficit or high unemployment in the U.S.; on the contrary， it might seriously affect the progress of China’s reform of the exchange rate regime and might also result in a trade war that no one would like to see. From the perspective of the U.S. experiences， politicizing economic issues does not help solve the problems per se， but would rather complicate the problems， and adversely impact economic recovery and market confidence. We hope that the U.S. administration， the Congress and all the American people of insight will take effective measures to prevent the exchange rate issue from escalation and trade protectionism from spreading. We need to maintain the good momentum of the Sino-U.S. relationship， and to work together to contribute to strong， sustainable and balanced growth.Ministry of Foreign Affairs of the PRCForeign Ministry Spokesperson Liu Weimin’s Regular Press Conference on October 12， 2011Chinese Ministries of Foreign Affairs and Commerce as well as the People’s Bank of China reiterated China’s solemn position on the US Senate’s RMB exchange rate-related bill. I want to stress that the bill severely violates the WTO rules and impairs bilateral economic cooperation. It can not serve the purpose of addressing the economic and employment problems of the US， but will obstruct the joint endeavour of China and the US to promote strong global economic recovery and growth. To put it simply， it will not only hurt the interests of others but also the US and bring no good but harm. China firmly opposes it.We urge relevant US lawmakers to bear in mind the larger interests of the global economy and China-US economic cooperation and trade as well as the interests of the US itself， stop pressuring China by means of domestic legislation， discard protectionism， refrain from politicizing economic and trade issues and take concrete actions to create an enabling environment for the development of bilateral business ties.Foreign Ministry Spokesperson Ma Zhaoxu’s Remarks on the US Senate’s Adoption of the RMB Exchange Rate-Related BillChina has repeatedly reiterated its policy on the RMB exchange rate and manifested its solemn position on firmly opposing the US Senate’s RMB exchange rate-related bill. Under the pretext of so-called “currency imbalance”， the bill in fact wields protectionism and severely violates the WTO rules. Instead of resolving economic and employment problems of the US， it will only cause grave damage to ChinaUS economic relations and trade and obstruct the efforts of both countries and the international community to push for strong global economic recovery and growth. It will not only hurt the interests of others but also the US and bring no good but harm.China calls on the US Government， Congress and all sectors of the society to resolutely oppose playing up the RMB exchange rate issue and exerting pressure through domestic legislation and reject protectionism and the erroneous act of politicizing economic issues， with a view to safeguarding the sound development of China-US economic relations and trade.Ministry of CommerceMOFCOM spokesperson Shen Danyang commented on US Senate passing of Currency Exchange Rate Oversight Reform Act of 2011On October 11， US Senate passed Currency Exchange Rate Oversight Reform Act of 2011. Concerning the issue， MOFCOM Spokesperson Shen Danyang commented that， in this critical moment for world economy to recover， US Senate force， through legislation， its trade partner to appreciate currency， which is just like sending signal of trade protectionism update and is wrong. It violates international rules， and not only threatens steady development of China-US trade and economic relations， but also runs counter to joint efforts of all nations in the world to together cope with challenges and combat trade protectionism. China firmly opposes it.Mr. Shen stressed that， China has been always calling for strengthening communication between China and US， and adopting active and positive measures to progress ChinaUS trade and economic cooperation. Once the said bill of US Congress becomes law， China-US trade and economic relation must be seriously damaged， which is not what China wants to see. We hope the US can give a through and clear consideration to this， objectively and reasonably look at the exchange rate issue， and make the right decision.China Chamber of International CommerceDeclaration of China Chamber of International Commerce on the U.S. Senate’s Voting to Pass Currency Exchange Rate Oversight Reform Act of 2011On October 11， the U.S. senate voted to pass the Currency Exchange Rate Oversight Reform Act of 2011， regardless of objections from various sides. This act will enable the U.S. government to issue punitive tariffs against its main trading partners whose exchange rates are undervalued. Obviously this move mainly means to pressure the Chinese government to speed up the RMB appreciation process.On behalf of the Chinese business circles， the China Chamber of International Commerce declares strong objections against the U.S. senate’s voting to pass the Currency Exchange Rate Oversight Reform Act of 2011.It has been widely acknowledged that since the Chinese exchange reform was implemented in 2005， the RMB has appreciated by 29.68% on a cumulative basis. Since early 2011， the RMB has risen by 3.85% and in the future several months， this trend might continue. In fact， the exchange rate of RMB with the USD would have been lower without the tight capital regulations by the Chinese government. In the past month， investors’capital withdrawal has led to the 10% depreciation of the exchange rates of many other Asian currencies against the USD. The exchange rate of offshore RMB in Hong Kong has slid by 3% since September 1.The U.S. senate’s voting to pass the Currency Exchange Rate Oversight Reform Act of 2011 has paid no regards for the true facts， but simply aims to transfer pressures from mass unemployment at home. This move is unjustified and also in violation of rules and regulations by the World Trade Organization. It would not be able to solve U.S. problems including lack of savings， trade deficit and high unemployment rate， but on the contrary， would jeopardize the stable development of SinoU.S. economic and trade partnerships.It is not wise for the U.S. side to pass the act， because it has severely discouraged the confidence of Chinese companies， especially when China is expanding its size of import from the U.S. by 17% annually， and speeding up its foreign investments on the U.S. land. The U.S. side has made the issue of exchange rate a political one， which will provide no easier solutions to unemployment problem， and create no favorable conditions for the normal development of bilateral trade.The China Chamber of International Commerce has long cooperated with the State governments of the U.S. to promote the export of U.S. small and medium-sized companies to China， and encourage its member companies to invest in the U.S. The Chinese business operation and local purchase in the U.S. have provided job opportunities for tens of thousands of U.S. families. The passing of the Currency Exchange Rate Oversight Reform Act of 2011 has made us reconsider the investment environment of the U.S.The financial crisis originating in the U.S. has caused huge difficulties for the U.S. economy and people. Similarly， the Chinese small and mediumsized companies， as well as millions of labor workers they hire， are also having great burdens to bear. We think that during such a tremendous crisis， all countries should share a great sense of responsibility， and join hands to solve common problems through cooperation and dialogue. Thereby the China Chamber of International Commerce calls on people with vision and insights from the U.S. government， the congress and society， to take prompt measures to address the issues of exchange rate and trade protectionism. We also hope that the U.S. side could proceed with its decisions from general interests， to protect the just nature of the international trade environment and stimulate the recovery of the world economy through mutual efforts between our two countries.
