China stepped up its criticism of a proposed U.S. law to punish countries with artificially low currencies, saying there would be serious repercussions for the world’s two biggest economies if it is passed.
The criticism comes after U.S. senators voted Monday to open a week of debate on the bill that would allow the government to impose additional duties on products from countries that subsidize exports by undervaluing their currencies.
How worried China is about the proposed law can be seen by the fact that the Foreign Ministry, the Commerce Ministry and central bank all issued statements denouncing it.
Chinese Foreign Ministry spokesman Ma Zhaoxu said the Senate move “seriously violated WTO rules and seriously disturbed China-U.S. trade and economic relations.”
Ma said China is reforming how it manages the yuan and that since June 2010 it had increased in value by 7 percent compared to the dollar.
He repeated Chinese comments that the exchange rate is not the cause of America’s big trade deficit with China.
Ma said in a statement that China is the fastest growing export market for the United States and trade is important to both sides.
Supporters of the legislation say it would create new jobs and boost the U.S. economy, but China, and some in the United States, say it could trigger a damaging trade war.
Commerce Ministry spokesman Shen Danyang said China has taken measures to increase U.S. imports and added Beijing hopes “the U.S. side can make positive efforts in substantially relaxing restrictions on exports to China.”