UPDATE 1-W.House keeps pressure on China over yuan

Published 09/30/2010, 02:27 PM
Updated 09/30/2010, 02:32 PM

(Adds quotes and background)

WASHINGTON, Sept 30 (Reuters) - The White House kept pressure on China on Thursday over the valuation of its currency but gave no clear sign whether President Barack Obama supports a House bill that threatens to penalize Chinese goods.

The House of Representatives passed a measure on Wednesday that would treat China's yuan exchange rate, widely seen in the United States as kept artificially low, as an unfair subsidy, opening the door to punitive U.S. tariffs on Chinese products entering the United States.

Asked whether Obama would sign such a bill if it made it to his desk, White House spokesman Robert Gibbs told reporters: "I don't have any clarity on that."

Obama has yet to take a position on the legislation, which is not expected to be taken up by the U.S. Senate until after the Nov. 2 congressional elections. But the White House has insisted that any such measure must meet World Trade Organization rules.

The Obama administration has stepped up criticism of Beijing over its currency, mindful of the need to show that the president and fellow Democrats are serious about anything that jeopardizes U.S. jobs in an election season when high unemployment and an anemic economy are voters' top concerns.

Gibbs said he did not know to what extent the House bill had been evaluated by the administration. "Obviously, it has at least another step, at least one more step to go in the Senate," he said.

"Lawmakers on Capitol Hill share the same serious concern that the president and (Treasury) Secretary (Timothy) Geithner have," he said. "We have said for quite some time that the currency is undervalued and that reforms need to be undertaken."

Obama and Chinese Premier Wen Jiabao discussed China's currency and huge trade surplus with the United States during a meeting on the sidelines of the U.N. General Assembly last week, aides said.

China on Thursday warned that the House bill could seriously affect bilateral ties. Relations have already been strained by a series of economic and foreign policy disputes.

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