Senate leader eyes action on China currency bill

By Doug Palmer

WASHINGTON (BestGrowthStock) – The Senate could vote by the end of May on legislation to prod China to raise the value of its currency, a spokeswoman for Senate Majority Leader Harry Reid said on Friday.

“If China does not satisfactorily address the concerns raised by its currency policy, this legislation could come to the floor in some form during the upcoming work period,” Reid’s spokeswoman said.

The warning came just a few days before Chinese President Hu Jintao will be in Washington for a nuclear security summit hosted by U.S. President Barack Obama.

Reid wrote Hu in December to urge a “significant revaluation” of China’s currency, known as the renminbi (RMB) or yuan.

“China’s currency policy has been causing major distortions in the world economy for too many years already, and is continuing to do so now,” Reid said in the Dec 9 letter.

“I hope you would consider a significant revaluation to bring the value of the RMB in line with economic fundamentals, and after that, to return to a more robust version of the ‘managed float’ that your government previously maintained,” Reid said.

Earlier this week, U.S. Treasury Secretary Timothy Geithner made a surprise trip to Beijing to meet with Chinese Vice Premier Wang Qishan.

The visit, coming shortly after Geithner decided to postpone an April 15 report on whether China or any other country is manipulating its currency for an unfair trade advantage, has fueled expectations Beijing might raise the value of its currency by a slight amount over the weekend.

Many U.S. lawmakers, such as senators Charles Schumer and Lindsey Graham, believe China’s currency is undervalued by as much as 40 percent and have been pressing for action on a bill that would allow new duties on some Chinese goods.

“Senator Reid has talked to Senator Schumer and supports the goal of this legislation,” the Reid spokeswoman said.

The Senate, which returns next week from a break, is scheduled to be in session until its next break for the Memorial Day holiday in late May.

Stock Market Today

(Editing by Dan Grebler and Leslie Adler)

Senate leader eyes action on China currency bill