This is now the fourth hearing we’ve held on China this year, but only the first time that we’ve had an Administration official here to testify. Secretary Geithner, I am sure that you share my concern about China’s currency policy. It is fundamentally misaligned, plain and simple. I presume there is no disagreement on this point.
In our prior hearings, including yesterday’s hearing, there was a striking consensus among most of the witnesses that the Administration should pursue an aggressive multilateral approach to address China’s currency policies. These witnesses noted that there is no reason to act unilaterally when so many other countries are also significantly affected by China’s currency policy. However, the Administration has yet to take up this approach.
Since the Obama Administration took office, the RMB has appreciated by less than 1.5%. In contrast, from 2005-2008, under the Bush Administration, the RMB appreciated by approximately 20%. The lack of progress over the last 20 months is unacceptable.
Because quiet bilateral diplomacy by you and your colleagues in the Obama Administration has failed to date, there is a real desire in Congress to act in the absence of results by the Administration. Unfortunately, as we found out at yesterday’s hearing, current proposals – in particular the Ryan bill – are deeply problematic and could expose the United States to WTO-authorized retaliation. Passage of punitive unilateral legislation is also likely to frustrate any efforts at continued diplomacy, and may significantly interfere with efforts to establish a more robust multilateral process.
Mr. Secretary, I want to be clear that we must see more effective action by the Administration. In four weeks, you are scheduled to submit the biannual report analyzing the currency practices of our major trading partners, including China. The last report was almost three months late! This kind of delay is unacceptable and greatly complicates Congress’ efforts to develop the correct response to deal with the lack of progress we’ve seen under this Administration. I hope that you can assure us today that you will issue a timely report this October. Such a report provides critical information, and its delay is harmful to our deliberative process.
With an assurance that you will deliver this report on time, I look forward to hearing from you on what the Administration will do to create and implement a robust multilateral process, what the Administration’s views are on the Ryan legislation, and why the Administration has stopped pursuit of a Bilateral Investment Treaty with China. Fundamentally, I want to know how the Administration will ensure that the appreciation of the RMB we saw from 2005 to 2008 will resume.