Washington, DC, April 25, 2006--The National Association of Manufacturers (NAM) today expressed appreciation for the fact that the G-7 Finance Ministers and Central Bank Governors agreed China needs to allow faster appreciation of its currency and lessen reliance on export-led growth strategies.
“The NAM has been pressing for several years for a more market-oriented exchange rate for China’s currency as a means of lessening trade distortions,” said NAM President John Engler,“ and it is extremely important that the call for upward appreciation of the yuan has now been multilateralized with unanimous agreement by the world’s major economies.
“A multilateral approach is always better than a unilateral one,” said Engler,“ and the G-7 statement marks a watershed in this process--showing that the United States is no longer alone in pointing to the needed adjustments.” Engler quoted the G-7 Communiqué of April 21 that said, “In emerging Asia, particularly China, greater flexibility in exchange rates is critical to allow necessary appreciations, as is strengthening domestic demand, lessening reliance on export-led growth strategies, and actions to strengthen financial sectors.
“America’s manufacturers are also very pleased that the International Monetary Fund (IMF) is shifting gears and will become much more aggressive in working both multilaterally and bilaterally to deal with the forces that are causing trade imbalances,” said Engler. “The world needs an effective IMF if we are to deal with imbalances before they become so huge they become unstoppable runaways, and we urge the IMF to move quickly.
“Treasury Secretary John Snow deserves full credit for his ceaseless work to bring about this weekend’s developments,” said Engler, “as does his key currency deputy, Under Secretary Tim Adams.
“As important as this weekend’s G-7 and IMF developments are,” cautioned Engler, “the need for translating these decisions into actually obtaining more rapid and more significant movement of China’s currency remains an imperative.” He concluded by saying, “Treasury needs to continue the pressure by citing China’s currency manipulation in its forthcoming currency report to the Congress--but also needs to be mindful that the G-7 is right in saying other emerging Asia currencies need to appreciate as well. ”
