United States Treasury Secretary John Snow is in Beijing passing
on US concerns about the value of our currency, the yuan or
renminbi.
Timely communication and consultation are essential for the
United States and China, two of the most active and important
players in world trade. This is especially so as economic woes
worldwide are crying out for an effective cure.
Considering the sheer size of the two countries' exports and
imports to and from each other alone, how the two act and interact
will have an impact on the world economic scene.
Exactly because of such high stakes, reason should always be
used when the two economies react to each other.
What has pushed Snow to our doorsteps, however, is a tide of
complaints that display a gradual drain of sensibility in his home
country.
From Washington to major manufacturing bases, the arguments are
rampant that China should be held accountable for the economic
troubles dogging the United States. It is claimed that by
artificially keeping its currency weak, China has gained unfair
advantages for its cheap exports to the United States, thus
throwing US citizens out of work. A well-touted prescription that
is also favored by the White House is the appreciation of the
yuan.
Even Japan has jumped on the bandwagon, even though it fell into
further economic misery after it raised the value of its own
currency under US pressure in the 1970s.
The calls are so overbearing that it would appear that all
countries are the victims of Chinese selfishness. So, unless China
stops being selfish and re-evaluates the yuan, the United States
will suffer, Japan will suffer, and the rest of the world will
suffer.
It no longer matters how unselfish China was during the 1997
Asian financial crisis. The very same decision, once acclaimed as
heroic, not to devalue our currency when our neighbors did is now
coming under fire.
Neither does it seem to matter whether the economic difficulties
of the United States and Japan have their roots in those
countries.
China is now on trial. As reason gives in, an issue that is
economic in nature is dressed up in a weighty political matter.
Snow talked about growth during his visit to Japan earlier this
week. He is obviously aware of the significance of growth for an
economy.
The US and Japanese economies must grow to get out of their
current plights.
The Chinese economy cannot afford not to grow. Once the Chinese
economic locomotive loses steam, so does the world's.
In this sense, China's idea of basing its currency policy firmly
on its own national conditions is in itself a contribution to the
world as a whole because this policy delivers genuine benefits.
As those with insight have observed, the appreciation of the
yuan may ultimately go against the intentions of its advocates by
throttling the Chinese economy and damaging their own economies in
return.
After all, our economies are now interwoven more tightly than
ever.
For the well-being of the Chinese and US economies, as well as
that of the world, both Snow and his Chinese counterparts should
follow the dictates of reason in their dealings with the now
politically charged topic.
(China Daily September 3, 2003)