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June 10, 2004

China’s Erroneous Numbers: First Report from the Fair Currency Alliance

June 10, 2004

China’s Erroneous Numbers: First Report from the Fair Currency Alliance
Inaccurate Trade Data Distort Degree of Manipulation

(Washington, D.C.) (June 10, 2004)─The Fair Currency Alliance today published the first in a series of briefs focusing on how China manipulates its currency and the resultant damaging impact on U.S. trade, the Chinese economy, and the global financial system. (Note to Editors: Brief No. 1 attached.)

The inaugural brief analyzes misleading trade data, as reported by China, compared to the same data reported by its trading partners; and reports on how false data distort the degree of China’s currency manipulation.

Explaining why this inaccurate math is relevant and how it impacts U.S. commerce, David A. Hartquist, spokesman for the alliance, said, “China grossly underestimates its trade surplus. Since establishing the value of the yuan is tied to these numbers, reliable statistics are essential.”

Hartquist explained that the alliance arrived at this conclusion by comparing China’s official data with the data from 43 countries that trade with China. “When you add-up the numbers, it is clear that China’s trade surplus is three times larger than reported by official China,” he said.

“They are manipulating their currency and China should promptly revalue the yuan upward by about 40 percent. Further, the U.S. government should pressure them to do so before more damage is done to our manufacturers and jobs,” Hartquist concluded.

Topics for future briefs include estimates of the degree of undervaluation of the yuan; provisions of international agreements that China is violating; the impact that the undervalued yuan has on the Chinese economy and the global financial system; and steps that the U.S. government should take to ensure parity and fair play.

The Fair Currency Alliance is a group of U.S. industrial, service, agricultural and labor associations.

David A. Hartquist, international trade attorney with the Washington, DC law firm Collier Shannon Scott, PLLC, serves as counsel to the alliance.