U.S. Democratic Senator Charles Schumer stated on local time that he will push the Senate to vote on a bill targeting China's exchange rate policy within the next two weeks to further pressure the appreciation of the Renminbi (RMB).
Schumer made these remarks at a meeting of the U.S.-China Economic and Security Review Commission, a congressional body. Schumer also noted that he would add the RMB exchange rate provision as an amendment to the small business credit bill submitted by President Obama.
During the meeting, Schumer openly expressed his dissatisfaction with China, stating that China's undervaluation of the RMB has led to millions of job losses and the closure of thousands of businesses in the United States. "If the U.S. government can successfully pressure the RMB to appreciate, the effect on the U.S. economy would exceed any massive economic stimulus plan, as U.S. exports to China would benefit from it."
Schumer also threatened that if the RMB does not appreciate, he would authorize the U.S. Department of Commerce to impose tariffs and anti-dumping measures on goods from China.
Charles Schumer is a key figure in the U.S. Democratic Party, currently ranking in the top three. He played a significant role in the failed bid by CNOOC for Unocal and subsequently pushed for an amendment aimed at creating more obstacles for foreign companies acquiring U.S. firms.
The main supporters of this proposal also include: Michigan Democratic Senator Debbie Stabenow, South Carolina Republican Senator Lindsey Graham, and Ohio Democratic Senator Sherrod Brown.
On the 10th, local time, U.S. Treasury Secretary Timothy Geithner will attend a hearing of the Senate Finance Committee, where the issue of the RMB exchange rate is expected to be one of the focal points of the debate.
The G20 summit is scheduled to be held in Toronto on the 26th of this month. The U.S. senators' clamor for RMB appreciation, coming just before the G20 summit, adds another layer of significance to the move.
Wang Tao, Chief China Economist at UBS Securities, predicted in a report yesterday that "the RMB will decouple from the U.S. dollar in the coming weeks, with an initial slight appreciation of about 3% against the dollar."
Wang Tao also stated that China's export growth will slow down starting from the third quarter, but the growth in actual export volume will continue to outpace imports for the remainder of the year, ensuring that the trade surplus for the full year of 2010 remains substantial.