“We agree with many in Congress and the administration that China needs a yuan exchange rate that responds to trade flows and that China should move steadily towards a market-determined exchange rate,” said a letter sent to Senate Majority Leader Harry Reid and Minority Leader Mitch McConnell. However, the letter reads, “unilateral legislation on this issue would be counterproductive not only to the goals related to China’s exchange rate that we all share, but also to our nation’s broader objectives of addressing the many and growing challenges that we face in China.”
These challenges include inadequate protection of intellectual property, restrictions on market access, the need for financial services liberalization, restrictions on the export of commodities such as rare earths, discriminatory indigenous innovation and other industrial policies, according to the letter.Such legislation would threaten job creation and economic growth at a time when the US dearly needs both, the letter stated.
“We urge you to oppose currency legislation and instead work with and vigorously call on the Administration to develop a robust bilateral and multilateral approach to achieve tangible results, not only on China’s exchange-rate policies, but also on other Chinese policies that are harming American economic interests,” the letter concluded.
