China Devaluation Shows Need for Currency Rules, Legislation, Say House Democrats

Several House Democrats lashed into China’s decision to devalue its currency in statements on Aug. 11. Earlier in the day, the Chinese Central Bank depreciated the value of the renminbi earlier by roughly two percentage points against the U.S. dollar (see 1508110022). While some consider the change to be part of aneffort to move the renminbi closer to market value (here), the devaluation falls in line with a long Chinese track record on market intervention, House Ways and Means ranking member Sandy Levin, D-Mich., in a statement (here). “There is reason to be skeptical of believing that the largest devaluation of the Chinese currency in over two decades is merely about moving to a market-based exchange rate,” said Levin “This action highlights the need to include a strong and effective obligation on currency manipulation in [the Trans-Pacific Partnership], and to include a provision to impose countervailing duties to address currency manipulation in the Customs legislation that is expected to be negotiated in a House-Senate conference in September.”