China: US has "Clearly a Double Standard" on Exchange Rates

It sounds hard to believe, but apparently China has detected a US “double standard,” whereby the US is demanding China strengthen its renminbi currency while itself intentionally weakening the dollar through money printing. These days, China is almost getting a little too good at calling it like it sees it.

According to the AFP:

“The criticism of US monetary policy and its weakening dollar comes as Washington maintains pressure on Beijing over its yuan exchange rate, which US lawmakers claim is grossly undervalued and causing global trade imbalances.

“US policies of ‘printing money’ and holding interest rates near zero were the main cause of the currency dispute, said a commentary by the Xinhua news agency, carried Monday in the central bank-backed Financial News. ‘In the eyes of some American politicians it is entirely reasonable to print money and keep the dollar exchange rate low, but it is illegal for other countries to protect their economic and financial security by pushing down exchange rates,’ it said.

“‘This is clearly a double standard.'”

OK, granted, it sounds a bit like a double standard. However, at least the US is standing firm in its stance, as opposed to equivocating on the position.

Here’s Addison Wiggin’s take in today’s 5 Min. Forecast:

“For the second time this year, the Treasury Department is withholding a semiannual report that labels other countries as ‘currency manipulators.’ The report was due Friday, but with the midterm elections coming up, and a G-20 summit a few days after that and the Treasury sec’y only now recovering from the tantrum he threw last week, they decided to punt.

“‘Had we named China as a currency manipulator,’ one Treasury official anonymously explained it to the Swoop, a foreign policy insider website, ‘we would have angered the Chinese; had we not done so, we would have angered American voters. Other than delay, it was a no-win.'”

Double standards and something akin to a spaghetti spine on the whole currency manipulation matter. These are not sounding like the best of days. You can read more details in the AFP’s coverage of how, according to China, the US has ‘double standards’ in the ongoing currency dispute.


Rocky Vega,
The Daily Reckoning