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Today, the Obama administration faces a congressional deadline on whether to formally declare that China is a currency manipulator. So far, the president hasn't decided to take that controversial step.

From Shanghai, NPR's Rob Gifford has more.

ROB GIFFORD: It is an article of faith for many in the U.S. that China's undervalued currency is responsible for many of America's economic woes. Similarly, it is an article of faith here in China that American politicians are twisting a complex economic issue for political gain ahead of midterm elections.

Lu Zhengwei is senior economist at one of China's major banks, the Industrial Bank.

Mr. LU ZHENGWEI: (Senior Economist, Industrial Bank): (Through translator) The issue has become completely politicized. Congress sets trade policy, and the congressmen pay no attention to the international economic situation. So they're just not interested in talking to us.

GIFFORD: It's not just the Chinese analysts here who reject the suggestion that appreciation of the Chinese yuan - also known as the renminbi - would save American jobs.

Andy Rothman of brokerage CLSA in Shanghai says Americans need to be careful not to shoot themselves in the foot - or at least in the pocketbook.

Mr. ANDY ROTHMAN (Strategist, CLSA): Voters need to ask a few questions of any politician or any economist or pundit in the newspapers that tells them that a stronger Chinese currency will solve all of America's woes. First of all, they need to ask: If the Chinese currency gets stronger, won't that make goods that I buy from China more expensive in the United States? And second thing is: If those things become more expensive, does that mean I can get a job making those things in the U.S.? When was the last time you saw a factory in the U.S. that made a laptop or DVD player or a flat screen TV?

GIFFORD: Rothman says that recent slight appreciations in the rate of the yuan against the dollar are not just small adjustments ahead of crucial meetings. They're the restarting of a slow currency appreciation process begun by the Chinese government in 2005 - indeed, exactly what some in the U.S. are demanding.

Mr. ROTHMAN: I think this is a long-term structural change. If you go back to 2005, the Chinese government decided that gradual appreciation of their currency against the U.S. dollar was in their interest, and so their currency rose by 21 percent over three years. Then they suspended the process after the global financial crisis hit, and now they're going back to that again. So I expect it to appreciate still on a 7 percent annualized basis.

GIFFORD: That won't be fast enough to satisfy critics on Capitol Hill, especially ahead of the midterm elections. But Chinese and Western analysts here warn against the emotionalism of a pre-midterm, China-bashing frenzy. They say the last time the U.S. put pressure on a major economy for a one-time, large-scale appreciation of its currency was with Japan back in the 1980s, and that move backfired and even contributed to the decline of the Japanese economy.

Chinese economist Sun Lijian of Fudan University says in the global context, American actions are just plain selfish.

Professor SUN LIJIAN (Economist, Fudan University): (Through translator) China's economy has made a large contribution to the global recovery, and China is leading the world economy in a better direction. So beating up on China over its currency will be very bad for the world economy as a whole, and will slow down the whole global recovery.

GIFFORD: Analysts say pressure to appreciate the yuan will not help the U.S. deficit with China, either. They say that between 2005 and 2008, as the yuan was appreciating by 21 percent, the U.S. trade deficit with China actually increased by 50 percent. Chinese economists say the way to solve the deficit is not to push China to revalue its currency, but to help lift more Chinese people out of poverty and into the nascent middle class so they can buy more American products.

Rob Gifford, NPR News, Shanghai.

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