[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. Res. 262 Introduced in Senate (IS)]







108th CONGRESS
  1st Session
S. RES. 262

   To encourage the Secretary of the Treasury to initiate expedited 
  negotiations with the People's Republic of China on establishing a 
 market-based currency valuation and to fulfill its commitments under 
                    international trade agreements.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            November 6, 2003

  Ms. Snowe (for herself, Mrs. Dole, Mr. Baucus, Mr. Graham of South 
 Carolina, and Mr. Bayh) submitted the following resolution; which was 
                  referred to the Committee on Finance

_______________________________________________________________________

                               RESOLUTION


 
   To encourage the Secretary of the Treasury to initiate expedited 
  negotiations with the People's Republic of China on establishing a 
 market-based currency valuation and to fulfill its commitments under 
                    international trade agreements.

Whereas the currency of the People's Republic of China has been tightly pegged 
        to the United States dollar at the same fixed level of 8.28 yuan to the 
        dollar since 1994;
Whereas the Government of the People's Republic of China has significantly 
        intervened in foreign exchange markets in order to hold the value of 
        their currency within its tight and artificial trading band, resulting 
        in enormous growth in China's dollar reserves, estimated to be over 
        $346,000,000,000 as of June 2003, an increase by 43 percent from June 
        2002;
Whereas the People's Republic of China has seen significant increases in 
        production capability, productivity, and foreign direct investment since 
        initially pegging the yuan to the dollar, which would generally lead 
        toward upward pressure on the currency value;
Whereas this peg, in the face of growing pressure, clearly represents a 
        manipulation of China's currency;
Whereas the undervaluation of China's currency distorts the value of exports 
        from China and the price of foreign products for Chinese consumers;
Whereas the value of China's currency has had and continues to have a negative 
        impact on the United States manufacturing sector, contributing to 
        significant job losses and business closures;
Whereas the G-7 Finance Ministers and Central Bank Governors in September of 
        this year stated that ``more flexibility in exchange rates is desirable 
        for major countries or economic areas to promote smooth and widespread 
        adjustments in the international financial system, based on market 
        mechanisms.''; and
Whereas the market-based valuation of currencies is a key component to the 
        health of global trade and the stability of the world economy: Now, 
        therefore, be it
    Resolved, That the Senate--
            (1) urges the Secretary of the Treasury to initiate 
        expedited negotiations with the Government of the People's 
        Republic of China, bilaterally or through the International 
        Monetary Fund, for the purpose of ensuring a market-based 
        exchange rate valuation to permit effective balance of payments 
        adjustments and to eliminate the unfair advantage; and
            (2) encourages the People's Republic of China to continue 
        to act on its commitments to the trade rules and principles of 
        the international community of which it is now a member.
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