Wednesday, October 12, 2011

China Currency Bill passed by the US Senate

US has been voicing its concern for a long time over the way China has been using unfair means and manipulating its currency to the disadvantage of US businesses. It is said that the Chinese businesses have a 30% pricing edge over their US competitors due to the low yuan.

US lawmakers have reacted to this by proposing a bill that will allow them to punish Beijing for the manipulation.

The US Senate voted 63-35 passed the legislation to punish Beijing's currency manipulation that is often blamed in that country for the high rate of unemployment. Those against the bill have voiced their concern that the bill could go against the provisions of World Trade Organization. However, nobody has disputed the fact that the way China keeps its yuan low is unfair.

The bill needs to be passed in the House of Representatives before going to the US President.

Experts believe that if cleared the bill will trigger a large-scale trade war that will have large-scale consequences, especially in the economically troubled US and Europe.