Senate Finance Committee Chairman Max Baucus (D-Mont.) is scheduled to be in China this week to speak to top Chinese officials on the issue of the Chinese currency, as well as other trade and economic issues.
Baucus said that the trip to Beijing and Shanghai –– scheduled for the week of Oct. 10 –– would provide the opportunity to discuss China 's currency manipulation and other trade issues with top Chinese officials to find solutions in the best interest of both U.S. and Chinese economies. His office said the chairman also will push China to further open its market to American agricultural exports, including beef and wheat from his state of Montana .
There is likely to be Senate action on some currency legislation in the lame duck session after Congress returns in November with Sen. Chuck Schumer (D-N.Y.) saying he would push his own Currency Exchange Rate Oversight Reform Act of 2010 at that time.
Meanwhile, Treasury Secretary Timothy Geithner is dismissing the prospect of a trade war with China or a more widespread outbreak of currency wars globally. "We're not going to have a trade war; we're not going to have currency wars. I don't know what that means, but people are saying that," Geithner said during an appearance in Washington .
Geithner said he believes the administration can manage relations with China to make progress on such issues as the exchange rate and intellectual property rights, and that a "substantial fraction" of China's leadership understands the importance of currency reform.
While the yuan has strengthened just 2 percent against the dollar since China announced in June that it once again would stop pegging its currency to the U.S. dollar, Geithner said the rate of appreciation picked up during September. "If that continues, it would make a really material difference on their economics and on our economics in ways that we think are important," he said.
Asked whether that means the Obama administration is opposed to legislation passed recently by the House aimed at penalizing China for an undervalued currency, Geithner said he didn't mean to imply that. As with any legislation, the administration will judge the bill based on whether it is consistent with international obligations and "we get benefits that offset the risks in deploying it," he said.
