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STEVE CHIOTAKIS: President Obama this week is rolling out new proposals to help revive the economy and create some jobs. But his top economic adviser, Larry Summers, is in Beijing. Summers is trying to encourage China to strengthen its currency, the yuan. But will that do anything to help the U.S. economy?
Here’s Marketplace’s China Bureau Chief Rob Schmitz.
ROB SCHMITZ: Between 2005 and 2008, China increased the value of its currency more than 20 percent against the dollar. There was hardly any impact on the U.S. economy. So why is Larry Summers in Beijing to try and convince the Chinese to appreciate its currency further?
ANDY ROTHMAN: This issue is completely unimportant to the economic future of the U.S. and the rest of the world.
China economist Andy Rothman says Summers’ China trip is a sign the Obama administration is caving into pressure from Congress. Democrats are trying to pass legislation that would pressure China to appreciate its currency. Lawmakers and other economists say that a more valuable yuan would revive U.S. manufacturing.
Economist Rothman doesn’t buy it.
ROTHMAN: The best the Chinese government can do for the global recovery is to keep doing what they’ve been doing — winding down the huge stimulus that has worked, and keep GDP growth on track for roughly 8-9 percent growth next year; that’ll be a big help to everybody.
Rothman says more Chinese consumers mean more U.S. exports, and that’s already happening. In the first six months of this year, U.S. exports to China increased 36 percent.
In Shanghai, I’m Rob Schmitz for Marketplace.
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