Wes Hickman (202-224-5972) or Kevin Bishop (864-250-1417)
– U.S. Senator Lindsey Graham (R-South Carolina) today made the following statement after meeting with Chairman of the Federal Reserve Alan Greenspan, Treasury Secretary John Snow, and U.S. Senator Chuck Schumer (D-New York.)
“Senator Schumer and I strongly believe the vote this spring by 67 Senators refusing to table the Schumer-Graham amendment seeking reform of the Chinese currency was a constructive signal from the Senate. It demonstrated the urgency and seriousness of Congress toward the China currency problem and is helping generate momentum in our efforts to bring about currency reform.
“The currency issue is one of the most important problems facing the global economy and directly affects U.S. manufacturing. There’s no doubt the current Chinese policy of pegging the yuan to the dollar creates an unfair discount for their products over American goods. Significant revaluation of the yuan would send a positive signal about the role China seeks to play in the global economy.
“After discussions with Secretary Snow and Chairman Greenspan, I’m convinced progress is being made on this issue. In light of this progress, I believe it is appropriate for us to show flexibility in giving this new engagement between China and the United States a chance to mature and develop. Therefore, Senator Schumer and I have agreed to postpone the impending July vote on our legislation. We’re hopeful this will allow Secretary Snow to continue to make progress.
“However, if progress on Chinese revaluation stalls, Senator Schumer and I retain the right to call for a Senate vote before the end of the First Session of the 109th Congress. The Senate Republican and Democratic leadership have agreed to this change.
“I agree with Chairman Greenspan that a revaluation of the yuan would be beneficial to both countries. I also appreciate Secretary Snow’s hard work on this issue and the involvement of President Bush. I remain hopeful there will be a positive outcome for both the U.S. and China in this endeavor. Much is at stake and I’m hopeful we can get a result that is a win for both nations.
“The benefits to the United States and world economy by moving toward a floating Chinese currency cannot be underestimated. While revaluation alone will not substantially change the trade deficit or improve manufacturing competitiveness, it will help create a ripple affect throughout Asia as other nations keep pace in revaluing their currencies. Over time, this combined effect will be tremendously beneficial to American manufacturing as Chinese movement on currency revaluation should be followed by their Asian neighbors.
“The more Asian nations come in-line with international monetary policy, the better the likelihood American manufacturing can compete throughout the world.”
Note: The First Session of the 109th Congress is scheduled to end October 2005.