Geithner on Currency Manipulation, and China's Reaction...

Filed in archive Yuan Renminbi on January 26, 2009

China is manipulating the value of their currency, the yuan renminbi. At least that's what Obama's new Treasury Secretary, Tim Geithner says.

The statement came as part of his 102-page response to questions from the Senate Finance Committee - part of the confirmation process in which the Senate approved him for the job.

Naturally, the Chinese government sees things differently, and doesn't mind saying so. From the Washington Post

Su Ning, vice governor of the People's Bank of China, called Geithner's remarks misleading and "out of keeping with the facts," and said they could sidetrack efforts to manage the global financial crisis...

"We should avoid any excuse that might lead to the revitalization of trade protectionism. Because it will do no good to the fight against the crisis, nor will it help the healthy and stable development of the global economy," Su said during a visit to a Beijing business newspaper.

While much of the world seems to think that Geithner's written remarks before the Senate constitute something like the opening salvo of a new protectionist era, Felix Salmon over at Seeking Alpha had what may be a more reasonable take on the issue. He sees the remarks as tailored to a select audience (the Senate Finance Committee), and as designed to win Geithner his confirmation.

And they did...


Photo courtesy of iStockphoto, Image# 3445678