海角大神

For those in the US who were disappointed that China did not use this week鈥檚 US-China dialogue to announce a revaluation of its currency 鈥� such as some members of Congress 鈥� the next occasion to watch may be next month鈥檚 G-20 meetings.

China knows it is under pressure to revalue its currency, the renminbi, as a sign of its willingness to address trade imbalances. But the Chinese government is more likely to act in the run-up to a major international economic gathering than in the context of a bilateral dialogue with the US, say some business and economic experts.

Even if China does respond to international pressure in coming weeks, say some of the same experts, any Chinese action is unlikely to have the kind of impact on US trade figures 鈥� and jobs 鈥� that Congress is looking for.

鈥淲e agree China ought to have an exchange rate that better reflects market influences,鈥� says John Frisbee, president of the US-China Business Council in Washington. 鈥淏ut we don鈥檛 think it鈥檚 going to have much of an impact on the bilateral trade deficit, nor do we think it鈥檚 going to have an impact on American jobs.鈥�

Despite the lack of action on currency, this week鈥檚 Strategic and Economic Dialogue in Beijing was positive, Mr. Frisbee says, if for no other reason than it kept bilateral discussions going on issues ranging from market access to fiscal policy and protectionism.

The US delegation to the talks, led by Secretary of State Hillary Rodham Clinton and Treasury Secretary Timothy Geithner, included more than 200 US officials 鈥� but failed to deliver any headline results. That outcome led some trade organizations to call the talks a sham and evidence of US weakness toward China, while rumblings resurfaced in Congress over what is considered to be China鈥檚 undervalued currency.

Some economic analysts say it was never likely that China would use the occasion of a US-China dialogue to announce a revaluation of the renminbi.

Derek Scissors, an Asia economics analyst at the Heritage Foundation in Washington, says he sees a better chance that China will take action prior to the G-20 meetings next month in Canada. But even then, he guesses that 鈥� if it happens 鈥� a revaluation will be small and largely a symbolic gesture.

鈥淭hey鈥檒l say something like, 鈥楾his is what the world has asked of us,鈥� 鈥� Mr. Scissors says. But 鈥渋t will be minor and won鈥檛 have any effect on US-China trade.鈥�

The US-China Business Council鈥檚 Frisbee says he foresees perhaps a return to the situation before July 2008, when China pegged the renminbi to the dollar. Prior to that action, the Chinese currency floated within a narrow band and was thus allowed to gradually though modestly rise in value. 鈥淭he Chinese know this issue is a political irritant with the US,鈥� he says.

But that scenario is unlikely to satisfy those in the US who want a dramatic move.

The result, Scissors says, could be additional fireworks over the US-China trade imbalance: not on the Fourth of July, but when Congress reconvenes after Labor Day.

Saying a revaluation of China鈥檚 currency is 鈥渘ot the administration鈥檚 issue鈥� but more Congress鈥檚 fixation, Scissors notes that he expects some expression of US frustration in the fall if China has not acted by then.

鈥淲hen Congress comes back in September of an election year, things tend to happen very fast鈥� on voter-popular measures, he says. If China hasn鈥檛 鈥渄eflected the fire鈥� from Congress with some action by September, Scissors says, 鈥淚t鈥檚 too late.鈥�

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