China is sending an envoy to Washington next week to ease tensions over trade and the rate of exchange for the Chinese yuan, which some U.S. lawmakers say is unfairly undervalued by as much as 40%.
China's Vice Commerce Minister Zhong Shan will go to the U.S. March 24 for three days of talks aimed at defusing tensions over the two nations' growing trade imbalance, the Associated Press reported Friday. In a related statement, the Commerce Ministry said "a lot of problems can be properly solved so long as we can avoid politicization and emotionalization," the AP said.
Beijing finds itself under increasing pressure to let the value of its currency rise. Some U.S. lawmakers are calling on President Barack Obama to declare the country a currency manipulator and face trade tariffs or sanctions if it doesn't allow the yuan to rise in value against the dollar.
Foreign trading partners have long pushed China to let the yuan rise because they see the undervalued currency as giving the country an unfair advantage by making its exports cheaper. But as China scrambles to put the brakes on a too-rapid expansion, a stronger yuan may be in its own interest this time as well.
Starting in 2005, China had let the currency rise slowly against the dollar. It rose 20% before the government abruptly reversed course when the economic crisis struck in 2008. A recent expansion in the flexibility of its tether to the dollar has further fueled speculation that an appreciation could be in the cards.
China Sending Envoy to Washington to Ease Trade Tensions