CHINA'S UNDERVALUED CURRENCY

Whom to Contact:

Neil Pratt
Senior Director, International Trade and Trade Counsel
(202) 974-5333
npratt@plasticsindustry.org

China's Undervalued Currency

For over a decade, the Chinese government has pegged the value of China's currency – the yuan – to an artificially low level vis-?-vis the U.S. dollar. In July 2005, China implemented certain reforms of its exchange rate system that eliminated the peg but continue to keep the yuan's value from rising to market-based levels. The undervalued yuan contributes to an artificially low price for Chinese goods exported to the United States and other markets, giving Chinese exporters an unfair competitive advantage. U.S. plastics exports to China are more expensive than they otherwise would be absent the distorted yuan-dollar relationship.

SPI has been working with groups such as the National Association of Manufacturers and the China Currency Coalition to seek reform of China's exchange rate policies. SPI's objectives are two-fold:

• Aggressive engagement with the Chinese government to seek reform of China's exchange-rate policies to achieve a market-based yuan value.
• Enactment of legislation to provide relief to U.S. manufacturers that are harmed by China's undervalued currency.

For More Information:

• China's Undervalued Currency: Know the Facts
• China Currency Coalition

***Visit the SPI Political Action Center to write your elected official about SPI-supported China currency legislation.

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