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Currency bill reveals U.S. protectionism, risking Sino-US ties: experts (2) |
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19:51, July 30, 2007 |
"I am not a believer in the currency elasticity theory of the bilateral trade fix. Without an improvement in U.S. saving, any such efforts on the currency front are doomed to failure," he said.
The net national saving rate of the United States averaged a record low of one percent over the past three years.
With little saving, U.S. economic growth had to to rely on massive capital inflow. Unfortunately, U.S. dollar''s position was being undermined by the strengthening euro and RMB yuan, said Tan Yaling, a research analyst with the Bank of China.
"Although the dominant position of the U.S. dollar will not weaken easily, the currency bill has unveiled a strong political hint that the American politicians want other countries to dance to their tune," she said.
The legislation allows U.S. companies to seek anti-dumping duties on goods from any country that maintains what the U.S. government calls a "fundamentally misaligned" exchange rate.
U.S. consumers and multinationals would stand to lose rather than benefit, because more than 60 percent of the total growth in Chinese exports originated from "foreign-invested enterprises", both Roach and Tan warned.
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