Senators Rip China over Value of Yuan China's undervalued currency is a hot topic on Capitol Hill again. Several senators say they're ready to force China to revalue the yuan. The Bush administration says this could start a dangerous trade war.
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Senators Rip China over Value of Yuan

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Senators Rip China over Value of Yuan

Senators Rip China over Value of Yuan

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RENEE MONTAGNE, host:

Those problems with imports from China are making an already tense trade relationship a little tenser. One sore point is China's currency, which is undervalued.

Several leading senators say they're serious about forcing China's hand.

As NPR's Adam Davidson reports.

ADAM DAVIDSON: Most China watchers agree on the facts but they disagree on the solution. The agreed-upon fact is that the Chinese government keeps its currency artificially low. They do this to keep Chinese exports cheaper. That means China sells more goods in the U.S. and American companies can only sell fewer things in China. The disagreement is over how big a problem this is for America and what the U.S. should do about it.

The Bush administration for years has recommended working cooperatively with China to encourage them to gradually adjust their currency levels. But many leading Democrats, especially the heads of the crucial banking and finance committees, say they're tired of waiting for progress and want tough action now. Those committees have each approved legislation that would force the administration to push China more aggressively.

Several senior administration officials, including the treasury secretary and trade representative, wrote a letter to Congress warning that such tough action will backfire. China and other countries could turn around and get tough on the U.S. in ways that would hurt the economy.

President Bush has promised to veto both bills.

Adam Davidson, NPR News.

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