“Dawson & Fielding Incâ€- There‘s trouble brewing in Beijing as the US prepares to vote on China‘s currency.
“Dawson & Fielding Inc†apparently believes that Beijing is likely to react negatively if the United States labels China a currency manipulator. On April 15th, The US must vote on whether China is deliberately manipulating its currency, the yuan, so that it remains undervalued compared to the currencies of other exporters and therefore confers an unfair advantage by making its exports cheaper.
In the event of a “yes†vote, US law requires that sanctions are imposed and this would invariably involve additional tariffs placed on Chinese goods imported into the US.
The yuan, or renminbi, is currently pegged at an exchange rate of 6.83 to the dollar and Washington believes that the rate should be reduced in order to bring the yuan into line with other currencies.
China is adamant that the yuan is not undervalued and has steadfastly refused to re-align the peg much to the chagrin of President Barack Obama. China is heavily dependent upon its export sector which employs millions of Chinese. “Dawson & Fielding Inc†analysts suggest that the re-alignment of the yuan would make Chinese goods more expensive and possibly result in many Chinese workers being laid off.
US Treasury Secretary Tim Geithner called China a currency manipulator during the first weeks of the Obama administration‘s tenure in the White House but the statement was later downplayed after protests from the Chinese authorities.
“Dawson & Fielding Inc†sources suggest that additional pressure could be brought to bear by Europe and other nations that trade heavily with China.