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May 24, 2005    

US demands 10 percent renminbi revaluation

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by Brian Turner
US demands 10 percent renminbi revaluation

The controversy over China’s currency has heated up, with the United States telling China that if they do not revalue the renminbi by at least 10 percent in relation to the dollar, they face legislation that would impose trade sanctions.

Such a bill, that would impose sanctions if China does not act within six months, has already been introduced by Senator Charles Schumer.

To impress the serious nature of the threat on the Chinese, according to sources, several envoys have approached Chinese officials on an unofficial basis.

These messengers are said to include former US secretary of state Henry Kissinger and Brent Scowcroft, who was national security adviser to former US presidents Gerald Ford and the first president Bush.

Besides a 10 percent revaluation at minimum, the Chinese are being told that they need to take other measures, including shifting to a currency band in relation to the dollar or a basket against a group of currencies to replace the current peg.

This is a continuation of a change to a more urgent course of action from the earlier, more gentle urgings for China to revalue its currency, and is being taken in the face of repeated warnings that threats will only make China more reluctant to act.

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