Treasury Secretary Timothy Geithner said China has the potential of becoming the largest foreign market for American exports, but he said the country must do more to dismantle unfair trade barriers.
He told Congress on Thursday that the Obama administration is committed to engaging forcefully with China to make sure that American workers are competing on a level playing field with Chinese workers.
"We want future growth in China to result in more exports from the United States and more jobs in the United States," Geithner said. "We want China to change those policies that disadvantage American companies."
Geithner said that distortions in China's currency policy are spreading far beyond China's borders and that reform in this area was critically important for the United States and the global economy.
"China is fast on its way to becoming the world's second largest economy and could potentially become the largest foreign market for U.S. exports of goods and services," Geithner said in testimony before the Senate Finance Committee.
Geithner said that as the United States emerges from the worst recession in decades, its exports to China have rebounded much more rapidly than exports to other parts of the world and are now running 20 percent above the pre-crisis levels. But he said that U.S. exports were still being held back by a number of Chinese trade practices including its currency system.
China is already the third biggest market for U.S. exports, up from 11th place just a decade ago. However, even with the big jump in U.S. exports, the United States still runs its largest trade deficit with China, one that last year totaled $226.9 billion.
Geithner sought to assure members of the committee that the administration was pursuing efforts to dismantle Chinese trade barriers.
But lawmakers expressed unhappiness that the administration has delayed issuing a report due in April that could have branded China as a country that was manipulating its currency to gain unfair trade advantages against U.S. companies and workers.
American manufacturers contend that the Chinese currency is undervalued by as much as 40 percent against the dollar. That means that Chinese products are cheaper for U.S. consumers but American goods cost more in the Chinese market.
Sen. Charles Grassley, R-Iowa, said that it was past time for Treasury to brand China a currency manipulator, a designation that could eventually lead to U.S. trade sanctions against Chinese imports. The Treasury report was scheduled to be issued in mid-April but was delayed by Geithner until after upcoming meetings of the Group of 20 major economies in Toronto in late June.
On Wednesday, Sen. Charles Schumer, D-N.Y., said that lawmakers intend to move forward in the next two weeks with a bill that would punish Beijing for currency policies critics say destroy Americans' livelihoods.
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