Despite improvement in the valuation of Chinese currency, the Treasury Secretary-nominee, Jack Lew, has said that it remains undervalued, asserting that the Obama Administration would continue to push China in this regard. "We have over the last four years pushed back very hard on China in a whole number of areas. We pushed back on our perception that the currency was undervalued. We pushed back on unfair trading practices. We engaged in the strategic and economic dialogues and bilateral discussions over many occasions," Lew told Senators during his confirmation hearing on Wednesday.
"I think we made progress. There's been a 15 per cent improvement in the valuation of China's currency.
"It's still undervalued, and more progress needs to be made," Lew said in response to a question from members of the Senate Finance Committee.
Senator Ohio Brown from Ohio in his remarks alleged that the Chinese currency manipulation is costing US jobs.
"There's been some movement in the right direction in the value of the yuan. We know that. But it's been too slow. It's been too little, especially when you consider the
US-China trade deficit.
"When trade deficits generally moved in the right direction, our trade deficit with China didn't go from 295 (billion dollars) to 315 (billion dollars)," he said.
"Do you agree that currency manipulation is in fact an export subsidy?" Senator Brown asked.
The Democratic Senator from Pennsylvania, Robert Casey, agreed with Brown.
"When it comes to just China's currency policies, that has a real impact, a tremendously adverse impact on communities in Pennsylvania. We've lost a lot of jobs because China has cheated, and I would argue continues to cheat on the currency policy," he said.
Casey hoped that Lew would keep an open mind as Treasury Secretary not simply to having a good engagement with the Chinese and, therefore, to have a better policy as it relates to their currency policy.
"I hope that you would seek new ways, maybe ways that are consistent with the bill we passed in the Senate, to have real consequences, to designate misaligned currencies than to have priority action, as the bill speaks to, which have real teeth and real consequence," he said.
In response Lew argued that the US would have to vigorously insist that the laws and international agreements be honoured, and that where they're not, that there be consequences.
"We've done that in the area of trade with China over and over again. We've done it in auto parts, we've done it in tires, we've done it in rare earth," he said.
"I think on the currency question, we work through the international bodies, the G-7, the G-20, to advance the view that it's not just the United States but the organised nations of the world that insist on having currency policies which are marked or determined. And in our bilateral relations, we push back very hard," Lew said.