Devoted to Managers and those that seek to improve their management skills

The semiannual report by the US Treasury avoided calling China a currency "manipulator." If the designation had been made, it could have triggered a process that would have led to sanctions in the form of tariffs. 

Obviously the Treasury knew what they would release if they had said China was manipulating their currency. Ignorant US lawmakers like Senator Christopher Dodd were salivating at the chance to score a few points with voters by sanctioning China with the tariffs, which could have reached 20 percent across the board.

Dodd, one of the bill's sponsors said, "A change in our currency manipulation policy is long overdue." This is imflammatory rhetoric that is based upon nothing but hot air.

He should have waited to read the report before he made the comments that made him look ignorant. The report stated that US officials can't in any way determine if the exchange rate policies of China were "carried out for the purpose of preventing effective balance of payments adjustment or gaining unfair competitive advantage in international trade."

So Dodd's assertion we need changes in our currency manipulation policy were unjustified and used the old tactic of speaking with assumptions that are put forward as being true.

While the report did say that the yuan is undervalued, there have been a number of financial experts and economists that have said the opposite. Some have said even if the yuan floated, it probably wouldn't move in a way that would make a difference in the trade deficit.

The usual blame for the loss of manufacturing jobs because of the value of the yuan is blowing smoke. Manufacturing job loss has been going on for years and years; as well as a growing US trade deficit. Of course politicians don't dare say who the real 'culprit" is, because they don't want to be voted out in next election.

Of course what I mean by that is American consumers demand and want the lower-priced goods that China offers. If politicians were to blame Americans for buying goods they couldn't otherwise afford, their future wouldn't be too bright in the political realm.

From the point of view of China, they do have problems in that they have focused so strongly on exports as the way of generating economic growth, that they have neglected to build a strong domestic market within the country.

As far as the valuation of the yuan goes, it did appreciate by 2.4 percent against the dollar in the latter half of 2006.