The Chinese government's announcement that the renminbi will be allowed to appreciate somewhat is certainly a step in the right direction, but is by no means an adequate response to the dramatic imbalances caused by many years of currency manipulation. The Chinese government's announcement was deliberately vague – failing to specify how far and how fast the currency will be allowed to move.  The AFL-CIO appreciates the efforts of the Obama Administration to address China's currency imbalances, but we strongly urge continued efforts to address the imbalance by Congress and the Administration.

Chinese currency manipulation is an issue with global impact. We strongly urge further effort by both the U.S. and other G20 governments until China takes specific steps on a scale that addresses the scale of the imbalance. In particular, the G20 governments must insist that currency manipulation be addressed head on at the upcoming meeting in Toronto.

Most economists believe that the renminbi is currently about 40 percent undervalued against the dollar.  What is needed now is a commitment from the Chinese government to rectify this imbalance – not another gradual float (as occurred in 2005-2008), where inflation and productivity growth actually outstripped the modest adjustments in currency value. 

The Chinese government's systematic and one-sided intervention in currency markets is not consistent with any trade model. It is a clear unfair trade subsidy-- and is a significant contributor to our jobs crisis.  It undermines American workers and American producers every day that it is allowed to continue.

It is time for China to significantly revalue the renminbi and allow market forces to determine the exchange rate going forward. In the absence of prompt and significant action, Congress must act on currency legislation without further delay.

Contact: Josh Goldstein (202) 637-5018