Bio: Congressman
(D-Ind.)The following originally appeared on TradeReform.org.

Washington, D.C. – Congressman Pete Visclosky entered the following statement into the record of the House Committee on Ways and Means’ hearing on China’s Exchange Rate Policy. Economists generally agree that the Chinese currency (the renminbi – “RMB” – or “yuan”) is substantially undervalued as a result of market intervention by the Government of the People’s Republic of China. This policy artificially raises the price of imports into China and suppresses the price of exports from China. The purpose of the hearing was to consider the immediate and long-term impact of China’s exchange rate policy on the U.S. and global economic recoveries and on U.S. job creation, as well as steps that can be taken to address the issue:

“I would like to thank Chairman Levin, Ranking Member Camp, and all Members of the Ways and Means Committee for holding this very timely and important hearing on China’s exchange rate policy. In the past, I have testified in person before this Committee on this critical issue, and I thank you for allowing me the opportunity to submit this statement for the record today.

“I write in my capacity as the Chairman of the Congressional Steel Caucus, and I would like to bring to your attention the sentiment of the steel industry that was expressed in a hearing I held last week on the state of the domestic steel industry. The Caucus heard testimony from executives of various steel companies and a representative from the United Steelworkers. All expressed a profound concern towards Chinese trading policies, including their currency manipulation.

“In the world of steel, China is of paramount concern. In 2009, China produced 47 percent of the world’s total output of steel, which is 567.8 million tons of steel. This is more than double the amount that China produced in 2003. Multiple factors contributed to this unprecedented increase in production, including illegal government subsidies and currency manipulation. By comparison, last year the United States produced around 60 million tons of steel, compared with around 100 million tons in 2003. Chinese currency manipulation is perpetuating this destructive trade imbalance and costing American jobs. Therefore, I implore you to advance H.R. 2378, the Currency Reform and Fair Trade Act, which would remedy this situation.

“Two quotes from the Steel Caucus hearing are particularly poignant on this issue. Mr. Tom Conway, International Vice President for the United Steelworkers, stated, ‘We must also get tough on trade to ensure that we do not continue to hemorrhage jobs and capacity due to unfair trade practices like currency manipulation.’ And Mr. Mario Longhi, CEO of Gerdau Ameristeel, stated, ‘We must ensure the U.S. is still a competitive place for manufacturing investment. This requires the U.S. to reverse the unsustainable imbalance that has allowed other nations to adopt policies supporting excessive exports of manufactured goods to the U.S., while we export debt and manufacturing jobs.’

“I also would like to bring your attention to a report recently published by Robert Scott, Senior International Economist and Director of International Programs at the Economic Policy Institute, entitled Unfair China Trade Costs Local Jobs. This report states that because of our trade imbalance with China, 2.4 million jobs were lost in the United States between 2001 and 2008, including 4,900 jobs from the First Congressional District of Indiana. The report highlights how Chinese currency manipulation has furthered this trade imbalance and American job loss, and how China has aggressively acquired U.S. dollars to further depress the value of its own currency. Specifically, China currently has about $2.4 trillion in foreign exchange reserves, of which about 70 percent are in U.S. dollars.

“Mr. Chairman, I believe that we are at a turning point in the discussion of this issue, and I applaud you for having this hearing with these prominent economists, which highlights the seriousness of the issue and the momentum that is growing for change. I again thank you for the opportunity to submit testimony and commend you and your Committee on your steadfast work.”

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