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July 21, 2005

MSCI Statement on China’s Modified Currency Announcement

 

July 21, 2005

MSCI Statement on China’s Modified Currency Announcement

M. Robert Weidner, III, president and chief executive officer of the Metals Service Center Institute, today issued this statement with regard to China’s currency policy announcement:

“Although China has taken a first, very small step towards the flexible, market-based exchange rate system that we and many others have advocated, today’s action does not go nearly far enough to respond to our concerns about the impact of Chinese currency manipulation on the North American manufacturing economy. The new policy responds to political concerns, but barely acknowledges the underlying significant economic concerns that we and many others in the manufacturing value chain, as well as Congress, have expressed.”

“Repeated studies have shown that the yuan has been undervalued by as much as 40%. Today’s decision to value the yuan at 8.11 to the U.S. dollar, vs. yesterday’s peg of 8.28 to the dollar, is inadequate. Furthermore, a 0.3% daily defined-band trading range does not constitute a significant movement towards a flexible foreign exchange market valuation. As has been the case for the last decade, the final decision on yuan pricing remains with the People’s Bank of China, based on its own agenda, and not to any real extent on foreign exchange markets. This is not a market-based system, but a managed system. Today’s action by the Chinese government is an attempt to reduce current political pressure on China.”

“While there have been several pieces of legislation introduced in the Congress, we continue to advocate passage of H.R. 1498, the China Currency Act of 2005, the Hunter-Ryan bill, now co-sponsored by 111 House members, including 65 Republicans. This bi-partisan legislation defines currency manipulation and makes it actionable under U.S. trade law. It is WTO-compliant and exactly what we need to provide meaningful remedies to American industries injured by currency manipulation.  We will continue our grass roots campaign as well as working with our Coalition partners to build even greater support for this bill.”

Founded in 1907, the Metals Service Center Institute has more than 370 members operating from about 1,200 locations in the U.S., Canada, Mexico, and elsewhere around the world. Together, MSCI members constitute the largest single group of metals purchasers in North America, amounting each year to more than 65 million tons of steel, aluminum, and other metals, with about 300,000 manufacturers and fabricators as customers. Metals service centers inventory, distribute metals, and provide first-stage fabrication services.

Contacts:

Steve Weiner, Readmore Communications, (847) 827-0002 or (847) 533-9143

steve@readmorecommunications.com

Jonathan Kalkwarf, MSCI chief financial officer, MSCI, (847) 485-3007 or

(773) 835-6108    

jkalkwarf@msci.org

About MSCI

Founded in 1907, the Metals Service Center Institute has more than 350 members operating from about 1,200 locations in the U.S., Canada, Mexico, and elsewhere around the world. Together, MSCI members constitute the largest single group of metals purchasers in North America, amounting each year to more than 75 million tons of steel, aluminum, and other metals, with about 300,000 manufacturers and fabricators as customers. Metals service centers inventory and distribute metals, and provide first-stage fabrication services.