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Geithner: China 'Manipulating' Its Currency

Strong charge could roil relations at a delicate time

By John Johnson, Newser Staff

Posted Jan 22, 2009 7:26 PM CST

(Newser) – Tim Geithner today accused China of "manipulating" its currency, a volatile charge in the diplomatic world that is certain to anger Beijing and possibly prompt it to sell some of its massive reserves of US dollars, the New York Times reports. The Treasury nominee made the accusation in a written response to senators, though it's unclear if the Obama administration will press ahead with a formal legal finding, the Times notes.

“The signal this sends is not good,” one trade expert told Bloomberg, referring to ties between the two nations. “It opens a Pandora’s box. We need the Chinese to hold onto their Treasury and agency debt." By keeping its yuan artificially low against the dollar, Beijing can make its exports more competitive. Geithner's statement signals that the Obama will take a tougher stance on China than Bush did.

[Images (3)]

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Treasury Secretary-designate Timothy Geithner gestures while testifying on Capitol Hill in Washington, Wednesday, Jan. 21, 2009. (AP Photo)

Treasury Secretary-designate Timothy Geithner delivers his opening statement on Capitol Hill in Washington, Wednesday, Jan. 21,2009. (AP Photo)

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President Obama, backed by the conclusions of a broad range of economists, believes that China is manipulating its currency.
- Tim Geithner, nominee for Treasury chief

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COMMENTS

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Showing 2 of 2 comments

Newser001

Jan 22, 2009 10:52 PM CST

See it the way it is, call it the way it is... We ALL must be unconditionally honest with one another. The fiçade is over - Time to deal with National and International financials - Calling attention to ambiguous practices of both National and International gravity... From now on, Nations must be dourly blunt with one another when dealing with our global monetary crisis... All, BS. Aside... There's no room nor time for games and deception.

justme

Jan 22, 2009 7:56 PM CST

About time!!!! Of course the US will pay a serious price for the debt we have built up. The Chinese can deflate the US dollar by selling it off.

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China • currency • Obama administration • Treasury secretary • Treasury bills • Timothy Geithner

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Geithner: China 'Manipulating' Its Currency