U.S. senators vow speedy push on China currency bill

By Doug Palmer

WASHINGTON (BestGrowthStock) – Two U.S. senators vowed on Tuesday to push for action on a bill aimed at pressuring China to strengthen its currency on the eve of a senior Chinese official’s visit to Washington to smooth differences.

Arguing that China’s exchange rate policies cost American jobs, the lawmakers said such pressure was necessary to make China move.

“My belief is that China will not do anything unless they’re required to, and every day we wait is a day we lose wealth, we lose economic advantage, we lose jobs,” said Senator Charles Schumer, a New York Democrat.

China and the United States have locked horns over Google Corp’s decision to defy Chinese Internet censorship, U.S. weapons sales to Taiwan, Tibet and sanctions against Iran’s nuclear program.

Schumer told reporters on conference call that he and Senator Lindsey Graham, a South Carolina Republican, would push for a vote on the bill by the end of May. The measure would allow U.S. companies to seek duties on Chinese goods to offset China’s currency policies.

“If we took the currency issue off the table, we would be more competitive in every sector,” added Graham.

They would put forth the controversial legislation regardless of whether President Barack Obama’s administration decides to formally label China a currency manipulator in a Treasury Department report due on April 15, said Schumer.

“We intend to move that legislation quickly,” he said. “We believe it will pass in a bipartisan way, overwhelmingly.”

China has denied it is manipulating its currency and warned it will retaliate if its goods are hit with U.S. duties.

Proponents of a tariff to press China to raise the value of its currency in order to cut its surpluses will testify at a House of Representatives Way and Means Committee hearing on Wednesday.

Beijing is sending Chinese Vice Commerce Minister Zhong Shan to Washington this week for talks at the U.S. Treasury Department, Commerce Department and the Trade Representative’s office.

Zhong, who Chinese sources have said is not a trade negotiator, is expected to sound out the Obama administration’s views on escalating tensions between the world’s largest and third largest economies.

HIGH-LEVEL TALKS IN MAY

The Chinese official could also discuss plans to hold the second annual U.S.-China Strategic and Economic Dialogue in Beijing. The high-level meeting expected to be held in late May, a U.S. Treasury Department spokeswoman said.

Chinese Premier Wen Jiabao said on Monday he hoped the May meeting will be “very important” for defusing strains between the two nations.

The dialogue will be co-chaired on the U.S. side by Treasury Secretary Timothy Geithner and Secretary of State Hillary Clinton. The Chinese side was led last year by State Councilor Dai Bingguo and Vice Premier Wang Qishan.

A report on Tuesday by the left-leaning Economic Policy Institute said China’s “currency manipulation” and other trade policies caused the loss of as many as 2.4 million U.S. jobs between 2001 and 2008.

“Unless China raises the real value of the yuan by at least 40 percent and eliminates other trade distortions, the U.S. trade deficit and job losses will continue to grow rapidly,” Robert E. Scott, an EPI economist and author of the report, said in a statement.

Analysts say China prefers closed-door, high-level talks to the public sparring over Google Inc (Read more about Google Stock Analysis) (GOOG.O: ) and currency that has dominated headlines for much of 2010.

Google on Monday began rerouting searches to its Hong Kong site, drawing angry criticism from China, following through on an announcement in January that it might quit China over Internet censorship and after a sophisticated hacking attack that it said came from within China.

China denies being the source of the cyber attack.

State Department spokesman P.J. Crowley told reporters that Google’s move was “a business decision” in which Washington played no part.

But he said the Obama administration would continue pressing China on Internet and information freedom.

“We value the economic relationship between the United States and China,” said Crowley. “That said, I think were I China, I would seriously consider the implications when one of the world’s most recognizable institutions has decided that it’s too difficult to do business in China.”

The U.S. trade deficit with China grew from $83 billion in 2001 to a record $268 billion in 2008 before falling to $226 million in 2009 alongside a collapse in world trade.

Last week, 130 members of the U.S. House of Representatives urged Obama to formally label China a currency manipulator in the April 15 Treasury Department report on foreign exchange practices of major U.S. trade partners.

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(Writing by Paul Eckert; Additional reporting by Tabassum Zakaria; Editing by Kenneth Barry)

U.S. senators vow speedy push on China currency bill