China currency debate does not solve US unemployme

China currency debate does not solve US unemployment
The currency reform bill, expected to be introduced in the House next week, will do little or nothing to resolve the high unemployment rate in the US or to revamp a sluggish economic recovery.
Douglas Paal,[link widoczny dla zalogowanych], vice president for studies at the Carnegie Endowment for International Peace,[link widoczny dla zalogowanych], said "The US lost jobs to China and they will stay lost. If a revaluation of the yuan would happen, the jobs would go to another country with cheap labor like Vietnam or Indonesia".
Stephen Roach, Morgan Stanley executive and Yale professor, called the currency debate a "bogus issue" that would have no impact on the US economy or the unemployment rate.
The purpose of the new currency reform bill is to find a legitimate way to demand the World Trade Organization to impose sanctions on China for unfair trade practices by "subsidizing" their own goods through an undervalued yuanrenminbi and keeping the price of US goods artificially high.
It is uncertain whether the WTO will impose any sanctions and how such would affect the current trade agreement between the US and China,[link widoczny dla zalogowanych], given that most DC insiders do not expect the bill to pass a Senate hearing or a vote.
President Obama and his staff have not officially commented on the bill.
The introduction of the new bill comes two days after the UN General Assembly meeting in NY and after private talks between President Obama and Premier Wen Jiabao amidst rising tensions between North Korea, Japan and China.
It would seem unproductive to launch a trade war with China over a currency issue in the middle of a prolonged international financial crisis.
A more realistic view would be that the dollar is being kept artificially low by Timothy Geithner and Ben Bernanke rather then other major currencies being "subsidized",[link widoczny dla zalogowanych].
The US has given its stamp of approval to Japan to weaken the yen through direct market intervention,[link widoczny dla zalogowanych], yet blames China for artificially keeping its currency weak.
Geert Noels, Chief Economist at Econopolis NV,[link widoczny dla zalogowanych], explained that the currency debate is not about increasing US exports to China given that the US lacks the manufacturing capacity to do so. Instead, Mr. Noels points out that the US wants to prohibit the growing monster [China] from growing.
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