CHINA remained defiant in the face of America’s move to treat its currency value as an illegal trade subsidy yesterday, and suggested the law could breach World Trade Organisation (WTO) rules.
A representative for the Chinese government said in a regular press briefing that the passage of the US Currency Reform for Fair Trade Act is “an excuse to engage in trade protectionism against China”.
“[It] can only harm China-US trade and economic relations, and will have a negative effect on both countries’ economies and the world economy,” said spokeswoman Jiang Yu.
The House of Representatives voted 348 to 79 in favour of the bill on Wednesday night, though it must win approval from President Obama and the Senate before it becomes law.
The measures allow the US to impose extra tax on Chinese exports to balance out what it sees as a chronically undervalued currency.
However, Yu said yesterday America falls foul of WTO agreements by targeting China’s yuan.
On Wednesday, China’s central bank promised to increase flexibility in the exchange rate, three months after ending its policy of pegging the yuan to the dollar.