19 - Currency Neg

ADI 2k5 Currency Neg
A/B/K/S 1/34
Index – Currency Negative
Index – Currency Negative................................................................................................................................................................................................................................1
Economy High Now..........................................................................................................................................................................................................................................2
US Econ – Consumer Spending.........................................................................................................................................................................................................................3
US Econ - Inflation............................................................................................................................................................................................................................................4
US Econ - Inflation............................................................................................................................................................................................................................................5
US Econ - Textiles.............................................................................................................................................................................................................................................6
US Econ – Stock Market....................................................................................................................................................................................................................................7
US Econ – Interest Rates...................................................................................................................................................................................................................................8
US Econ – Interest Rates...................................................................................................................................................................................................................................9
US Econ - Housing..........................................................................................................................................................................................................................................10
Trade Deficits Answers....................................................................................................................................................................................................................................11
Trade Deficits Answers....................................................................................................................................................................................................................................12
Manufacturing Answers...................................................................................................................................................................................................................................13
AT: Chinese Economy....................................................................................................................................................................................................................................14
Russia Econ DA...............................................................................................................................................................................................................................................17
Canada Econ DA..............................................................................................................................................................................................................................................18
Japan Economy DA.........................................................................................................................................................................................................................................19
South Korea Economy DA..............................................................................................................................................................................................................................20
Solvency...........................................................................................................................................................................................................................................................21
Solvency...........................................................................................................................................................................................................................................................22
Solvency – Modelling......................................................................................................................................................................................................................................23
Relations Links................................................................................................................................................................................................................................................24
MCR CP...........................................................................................................................................................................................................................................................25
MCR CP...........................................................................................................................................................................................................................................................26
Reg-Neg CP.....................................................................................................................................................................................................................................................27
Politics – Plan is Bipart....................................................................................................................................................................................................................................28
Politics – Plan is a Win....................................................................................................................................................................................................................................29
Politics – Manufacturing Lobby Likes Plan....................................................................................................................................................................................................30
Politics – Manufacturing Lobby Likes Plan....................................................................................................................................................................................................31
Politics – Manufacturing Lobby Has No Power..............................................................................................................................................................................................32
Politics – Manufacturing Lobby Hates Plan....................................................................................................................................................................................................33
China Threat K Links.......................................................................................................................................................................................................................................34
DON’T CALL IT A COMEBACK

A/B/K/S 2/34
Economy High Now
The economy will continue to grow stronger in the coming months.

Boston Globe, 2005 (“Economy grows at a strong pace”, lexisnexis.com, 7/30/2005)
Some economists said yesterday's report on the economy suggests even stronger growth in the coming months since inventories
declined sharply in the second quarter. With demand strong, companies will have to rebuild those inventories,
helping drive further expansion, some economists said.
The strong economy is showing staying power.

Boston Globe, 2005 (“Economy grows at a strong pace”, lexisnexis.com, 7/30/2005)
The economy shook off surging energy costs in the second quarter to expand at a healthy pace and set the stage for
solid growth in coming months, the Commerce Department reported yesterday.
As measured by the output of goods and services, or gross domestic product, the economy grew at a 3.4 percent annual rate in the three-month period ended June 30,
the agency said. That was somewhat slower than the 3.8 percent rate in the first three months of the year, but comfortably above the three-year average of 2.8 percent.
Even though energy prices hit record levels in recent months, the economy managed to keep chugging along in the second quarter.
Inflation-adjusted disposable income rose, sales surged, and both consumers and businesses spent at steady clips.
Exports jumped, too, growing at a nearly 13 percent annual rate, the fastest growth since the end of 2003.
And in a good sign for the Massachusetts high-tech economy, business spending on equipment and software accelerated to an annual rate of 11 percent, from about 8
percent in the first quarter.
"We're seeing very strong growth momentum," said Nariman Behravesh, chief economist at Global Insight, a Waltham forecasting firm. "This
recovery has staying power."

A/B/K/S 3/34
US Econ – Consumer Spending
Undervaluing the Yuan increase America’s shopping habits and severely handicaps companies in the U.S.
Marshall and Weber 2005 (Randi and Lauren, Staff Writers, New York Newswire, “Made in China, felt in America;
Because the Yuan is undervalued, U.S. interest rates are low, but manufacturing is declining, so the push is on to get China to float its currency”, July 5, 2005, online,
Lexis-Nexis,//ADI-TEB)
China is having profound effects on our economy - from providing a steady flow of cheap goods to feed America's
shopping habits to keeping mortgage rates low, as the nation invests in U.S. treasuries. There's really one central reason. China's
currency, the Yuan, is locked at 8.28 Yuan to the dollar, which means the exchange rate between the two never changes. So the yuan fails to reflect
China's growing strength and is now, by most accounts, significantly undervalued. That means China is able to
keep selling cheap goods to the United States, which helps to hold overall prices and interest rates here relatively
low. But it also puts a competitive handicap on companies here, and that's partly behind the demise of the
manufacturing industry. So U.S. politicians, economists and business executives are trying - so far unsuccessfully - to
persuade China to float its currency by allowing the yuan to trade at its true value on the open market." The
reality is that there should be a free market in currencies that would allow a company in Taiwan to have the same
competitive situation as a company in China or a company in Brazil ... including the U.S.," said Commerce Bank
chief economist Joel Naroff.

A/B/K/S 4/34
US Econ - Inflation
Revaluing the Yuan causes rising prices, inflation

Robert R. Ebert, Ph.D., March 2004, Buckhorn Professor of Economics “Dollars and Chinese Yuan”
From the perspective of the U.S., with an economic expansion just recently showing robust tendencies, pressuring the Chinese
to revalue the RMB is an attractive political and, at least short-term, economic However, there are no free lunches in economic
affairs. If the RMB is revalued upward, which means the dollar depreciates against the RMB, there could be long-
term economic consequences at home. A depreciated dollar will mean higher prices for goods from China for
which Americans have developed a rather healthy appetite. Rising prices increase the possibility of inflation,
which brings with it another set of problems, a discussion of which goes beyond the scope of this article.
Perhaps, in the best of all possible worlds the RMB would have been allowed to float after the immediate problems of
the Asian financial crisis abated. But, we do not live in the best of all possible worlds and must adjust U.S. policies to global economic realities.
Therefore, it may be appropriate that Secretary Snow has backed off somewhat from an adamant stance on the value
of the RMB. It would be a major miscalculation, if - as a result of pushing the issue too aggressively - we fell under the curse of
getting what we asked for, and in the process unleashed a whole new set of problems.
Due to dependence on bond sales, the rise of yuan would trigger mass selling that stifles US economic bubble.
Atlanta Journal Constitution, July 22nd, 2005. “China Lets Currency Rise in Value,” Pg. LN
The sudden change in China policy now has spurred concerns about long-term interest rates, like those used for mortgages.
T have been held down partly by Asian banks buying U.S. bonds. China now holds nearly $1 trillion in U.S.
securities. But a stronger yuan might mean fewer dollars in China, which might mean fewer purchases of U.S.
securities. That notion nud lower — which sent interest rates up Thursday. The Federal Reserve has finally found a way to push long-
term rates higher — by outsourcing the job to China, said Barry L. R market strategist of the Maxim Group. "The ultimate impact of
[Thursday's] events will depend upon how quickly and how muc central bank] decides to sell off some of their U.S.
Treasuries." Pessimists worry that it was the start of a trend, and that climbing rates would bring an end to the
boom in housing — the econ dependable growth engine since 2001. "The implications for America are enormous," said Peter Schiff,
president of Euro Pacific Capital in Newport Beach, Calif. "Far panacea that American politicians proclaim, China's decision to alter its peg could be
the pin that finally pricks America's bubble.
China hasn’t dumped their US bonds yet, but increased economic pressure may tip that balance and harm
investment in the US.
Financial Times, August 1st, 2005. “Revaluation, How much is it really worth it for us?”
India's reaction is still (at the time of writing) not known. One must, however, note that India is already practising a managed float
and, therefore, not much change is called for, except for the fact that China's exports to India will become dearer, albeit
by a small amount. There was speculation following the July 21 announcement on revaluation whether China will dilute its policy of
purchasing US Treasuries. Fortunately for the US, this has not so far happened. But one cannot rule out the
possibility that China may well desist from continuing to support the US Treasury issues. If it diverts a part of its
funds to other securities, we may see a rise in interest rates in the US, which will have adverse consequences on the
housing market as well as the overall rate of investment. China may not do this just yet because it depends vitally on the US as an export
market. Paradoxically, its economic salvation lies in the US chugging along at a robust rate of growth. So, much as the US's
senators may dislike China's interventionist policies, it is precisely these policies that are supplying China with the
dollar hoards that help to support the US bond markets and keep US interest rates benign and, incidentally, supply the
US consumer with cheap.

A/B/K/S 5/34
US Econ - Inflation
The appreciation of the Yuan will increase the price of exported Chinese made goods.
Asia Pulse, 2005 (“Yuan revaluation seen as good for the Philippine economy”, lexisnexis.com, 7/26/2005)
A stronger yuan makes it cheaper for China's consumers to buy Asian imports and harder for its exporters to
compete abroad, the report said.
Cebu Chamber of Commerce and Industry president and Prince Warehouse Club Inc. president Robert Go agreed.
He said the appreciation of the yuan will have negative effects on importers of China-made products, as a strong
yuan will increase the prices of these products, resulting in an increase in the importation costs.

A/B/K/S 6/34
US Econ - Textiles
Textile industry will receive losses of up to 60% due to revaluation.

South China Morning Post, July 29th, 2005. Reevaulation leads to Garment Maker’s Woes, Pg. LN
The textile industry has been dealt a double blow by restrictive quotas imposed by western nations on Chinese
exports and Beijing's decision to revalue the yuan, according to industry officials and the latest figures.Cao Xinyu , vice-president of the China
Chamber of Commerce for Import and Export of Textiles, said many textile firms were scaling down operations or stopping
production of some items.The China National Textile and Apparel Council, an industry regulator, said the 2.1 per cent appreciation of the yuan against the
greenback and the US safeguard measures imposed on Chinese textile exports would cost the industry as much as US$ 2.5 billion this year. The double blow
also would cost the industry 3.5 percentage points of growth in output, the council said on its website.A council study
suggests textile industry profits could drop by 2 per cent to 6 per cent on the back of a 1 per cent appreciation of the yuan."If the value of renminbi rises
by 5 to 10 per cent, the profit of the whole textile industry would drop by 10 to 60 per cent," it said, adding that
export -oriented enterprises would fare even worse.

A/B/K/S 7/34
US Econ – Stock Market
A wide swing in yuan value would cause havoc on the market.

Bangor Daily News, August 1st, 2005, “Chinese Economics,” Pg. LN
U.S. officials had called on the Chinese government to raise the value of the yuan by 10 percent. It responded on July 21 by
raising it by 2 percent, its first revaluation in nearly a decade. The currency will also be pegged to a basket of foreign currencies,
although the government declined to name which ones, rather than just the U.S. dollar. The yuan will be allowed to
"float" although government officials will control this too by ensuring that the currency's value does not change by
more than 0.3 percent in a day. Despite complaints that China manages its currencies, which all countries do, wide swings in the value of the
yuan would be bad for the United States and other countries.

A/B/K/S 8/34
US Econ – Interest Rates
Revaluation would lead to higher interest rates in the US.

The Economist, 2005 (“From T-shirts to T-bonds - China and the world economy; China and the world economy”, lexisnexis.com, 7/30/2005)
A study by Dresdner Kleinwort Wasserstein reckons that China has knocked almost a full percentage-point off America's inflation rate in recent years. The recent 2%
revaluation of the yuan will probably be absorbed by Chinese manufacturers trimming their profit margins and so will not be passed on into export prices. But
Americans calling for a 25-30% revaluation may come to regret it: the result would almost certainly be faster
inflation.
As it is, China's reduction of inflationary pressures has allowed central banks to hold interest rates lower than they
otherwise would be. Three and a half years into its recovery, America's real short-term interest rates are only 0.7%, almost two
percentage-points below their average at the equivalent stage in previous recoveries since 1960. This is good news
for borrowers, but some economists worry that the entry of China and other emerging countries into the global
economy may have affected monetary policy in ways that central banks do not fully understand.
Valuation of the Yuan causes inflation of US imports and jacks treasury yields
Kasriel, Director of Economic Research, 2005 (Paul L., “Prospects and Implications of Chinese Yuan Revalation” http://www.northerntrust.com, May 06, 2005)
The general depreciation of the dollar vs. Asian currencies would put upward pressure on U.S. import prices and U.S. Treasury yields. Approximately one-third of total
U.S. imports of goods are from Pacific Rim economies. This is the single largest regional import source for the U.S. The dollar has depreciated least vs. Asian
currencies since the start of its descent in 2002. Thus, a depreciation of the dollar vs. Asian currencies would likely have a larger impact on import prices than
heretofore seen. Foreign central banks tend to be much less “price-sensitive” in their purchases of financial assets than do private investors. Foreign official accounts,
largely Asian foreign official accounts, purchased a net $290 billion of U.S. government and agency securities in 2004. The principal motivation for these purchases
was to prevent their currencies from appreciating vs. the dollar. If Chinese and other Asian monetary authorities take a more relaxed approach to currency management,
then foreign official purchases of U.S. securities is likely to slow, which, all else the same, would put upward pressure on Treasury yields as more price-sensitive
private investors would have to purchase the excess. Also, the higher import prices resulting from dollar depreciation vs. Asian currencies would add to inflationary
pressures in the U.S. This could put upward pressure on U.S. interest rates via an increase in the inflation premium component of interest rates.
Revaluation of China’s currency would lead to higher interest rates, and weaken US corporations.
Bloomberg News Service, 2005 (“Rise in yuan could hurt U.S.”, the.Honoluluadvertiser.com, 5/15/2005)
Restive members of Congress are demanding China revalue its currency or face trade sanctions. Bush administration
officials are joining the chorus, led by Treasury Secretary John Snow's insistence that "the time has come" for China to move.
Some analysts say they should be careful what they wish for.
While a rise in the yuan may lead to an increase in exports of some American-made products, it may also lead to
higher interest rates, leaner stock portfolios, more expensive shopping trips, weaker hiring prospects and lower
profits at companies such as General Motors Corp., Wal-Mart Stores Inc., Dell Inc. and Coca-Cola Co.
"Politicians are playing with fire," says Ronald McKinnon, an economics professor at Stanford University in Stanford, Calif. Nouriel Roubini, a former
adviser to Treasury Secretary Robert Rubin, says America's reliance on China to plug record U.S. budget deficits means
lawmakers risk "biting that hand that feeds" the economy.
China would purchase less Treasury bonds with a stronger currency, leading to higher interest rates
Asian Tribune, 2005 (John Chan, “US Pressure Continues Over Value of Chinese Currency” 7/30/2005)
The September 26 edition commented: “Any decision by Beijing and other Asian economic powers to cut back on their US
government debt purchases leaves the Treasury market at potential risk. With a stronger currency peg versus the
dollar, China would purchase fewer bonds, as would Asian central banks if they were to cut back on currency market intervention (buying up US
debt to help prop up their own currencies). And further weakness in the Treasury market with a resulting bump higher in
interest rates, could weigh on the long-gestating US recovery. In that regard, US lawmakers should be very careful
what they wish for.”

A/B/K/S 9/34
US Econ – Interest Rates
Revaluation of will lead to higher interest rates

Post-Dispatch, 2005 (David Nicklaus, “Yuan revaluation is a no-win situation for U.S. economy”, lexisnexis.com, 5/20/2005)
"Most people are being suckered into believing a revaluation is a great thing for American business," said St. Louis
economist Neil George. "In reality, it's going to be neutral to damaging for many firms."
Companies have begun preparing for a change in the currency regime. David Helfrey, a Clayton attorney with extensive contacts in China, says he recently worked on a
contract where the American partner insisted on fixing the price of goods in dollars, thereby protecting its profit margins.
It's not so easy to protect the American consumer or the bond market, however.
Higher prices for imported T-shirts and DVD players would add to the bad news we've had recently on the
inflation front. And did you ever stop to think what the Chinese do with the dollars we spend on their consumer goods? They use them to buy U.S. securities. If
the Chinese buy fewer of our Treasury bonds, interest rates will rise and our booming housing and automotive
sectors will feel the pinch.

A/B/K/S 10/34
US Econ - Housing
An intense Yuan depegging process would cause China to sell it’s loans at a lower price back to the United States
effectively popping the housing bubble. The impact is global economic downturn.
The Economist, July 30th, 2005. “From T-Shirts to T-Bonds,” pg. LN
What does the breaking of the yuan's peg to the dollar mean for bond yields? American Treasury yields rose by 12 basis points after
Beijing made its announcement last week. Having played a hand in inflating America's housing bubble, could China now prick
it by pushing up mortgage rates, which are closely tied to long-term bond yields? If abandoning its dollar peg
causes China to reduce its purchases of T-bonds, then yields will rise. But this depends on several uncertainties. For instance, will last
week's revaluation reduce inflows of speculative capital into China, and hence its need to intervene in the foreign-exchange market by buying dollars? A large chunk of
China's foreign-exchange intervention over the past year has been to offset not its current-account surplus but inflows of hot money. If so, bond yields will remain low.
On the other hand, the switch from a dollar peg to a currency basket may cause China to diversify its reserves away from
dollars. It is unlikely to dump its dollars, but it could well reduce its new purchases of Treasury bonds in favour of other
currencies. And, if China really has broken the yuan's link with the dollar, then this could be the trigger for another
general slide in the greenback against the euro, the yen and other currencies, prompting investors to demand higher yields. The fate of
American house prices could thus be determined by unelected bureaucrats in Beijing rather than the unelected
central bankers of the West. This article has argued that global inflation, interest rates, bond yields, house prices, wages, profits and commodity prices are
now being increasingly driven by decisions in China. This could be the most profound economic change in the world for at least
half a century. And its effect could last for another couple of decades. By some estimates, China has almost 200m underemployed workers in rural areas, and it
could take at least two decades for them to be absorbed by industry. As this process takes place, it will continue to subdue wage growth and global inflation. Profit
margins could also remain historically high for a period (though not for ever, as stockmarket valuations in many countries seem to imply).China creates
immense opportunities, but it also brings new risks. If it stumbles, or if it decides to buy fewer American T-bonds,
pushing up yields, then America might really have something to complain about: the first global downturn made in
China.
A quick appreciation would increase interest rates and end the housing boom.
Asia Times, 2005 (Brian Wingfield, “Greater China: Keep your (made-in-China) shirt on…”, 5/27/2005)
Second, China can let the yuan float freely now. Doing so runs the risk of overvaluing the currency and drastically cutting exports, which many
regions of China have become economically dependent upon. It would also likely cause significant instability in the country's financial
system, which could have a profound effect on the global financial markets, including US markets. A sudden
appreciation of the yuan would effectively cause its dollar reserves to depreciate, which could in turn cause US
interest rates to rise. This could bring an end to the current housing boom in the United States, and it would
undoubtedly affect the debt levels of US credit card holders, which are currently sky-high.

A/B/K/S 11/34
Trade Deficits Answers
Even a 20% revaluation of the Yuan only reduced US deficits by 1% - can’t solve econ scenarios.
Financial Times, August 1st, 2005. “Revaluation, How much is it really worth it for us?”
China is embarking on a path which India had also adopted before it switched over to a managed float with
market-determined rates - which is now in vogue and highly appreciated by international financial gurus. The Chinese have been rightly cautious about
taking decisions on revaluation and subsequent changes of exchange policy. It is worth reminding ourselves that China's exchange rate changes cannot by themselves
address the massive problems that confront America or Europe. While China's revaluation, which will make its exports costlier, will
affect demand for its manufacturing industry adversely, it is not at all certain that the US will gain proportionately.
Indeed, an ADB report is stated to have concluded that even a 20% revaluation of the yuan would contribute to
less than 1 per cent of decrease in the US's current account deficit. The US seems to be barking up the wrong tree
when it insists on China's revaluation as a cure for its own problems. Ultimately, its solution lies in its own hands. It has to increase its
savings, reduce its budget deficit and set its house in order. Obviously, the US has decided to let others change policies in their countries
while it continues with its spendthrift ways.
Deficit solvency fails – China accounts for little of trade problem.

The Economist, July 30th, 2005. “From T-Shirts to T-Bonds,” pg. LN
Americans like to slap the "made in China" label on their huge trade deficit. Yet not only is China's forecast current-
account surplus of around $100 billion this year only a fraction of America's likely deficit of $800 billion, but, as chart 1
shows, most of the increase in America's trade deficit has come from outside China. The main cause of America's trade deficit is a lack of
domestic saving, not unfair Chinese competition. The deficit is thus made in America, not made in China.
Inflating Yuan is not enough to counterbalance U.S. Trade deficit

Market News international 2005 (May 10, 2005, “ANALYSIS: China Peg Move to Cut Criticism, Not Trade”, Online, Lexis-Nexis,//ADI-TEB)
"There is clear evidence that "hot money" is creating the bubble in the Shanghai property market, despite the
intention to cool the market down," Dong Tao, Credit Suisse First Boston chief Asia ex-Japan economist, said
recently.The International Monetary Fund, for example, has recommended that China reform its exchange rate
mechanism to increase the central bank's control over monetary policy, giving Beijing the right tools to
tackleoverheating in the economy without resorting to the draconian measures that it has traditionally relied on
Goldman Sachs, for example, forecasts a 2-3% upwards revaluation followed by a scrapping of the ten-year old peg and a move to a crawlingbasket of the currencies of
China's major trading partners. JPMorgan forecasts a one-step revaluation followed by a widening of
the trading band which will see the currency appreciate 7% by the end ofthis yea Although unlikely to satisfy the current peg's critics, who
maintain that the currency is undervalued by 15-40%, market expectations are that the initial move will be the first of several steps which will
see the yuan rise in value considerably against the US dollar over the next few years. That's just as well, because a first step at around 5% or
even 7% is unlikely to heal global imbalances such as the US trade deficit. "The impact should be relatively minor,
not enough to change the trade balance in the near term," said UBS economist Jonathan Anderson in a note to clients.
China is not the cause of the US trade deficit.

The Economist, 2005 (“From T-shirts to T-bonds - China and the world economy; China and the world economy”, lexisnexis.com, 7/30/2005)
In fact, that view is wrong on several counts. China is not the main cause of the American trade deficit. On the other hand, China
is behind almost everything else going on in the world economy. For China is beginning to drive, in a new and
pervasive way, economic trends that many countries assume to be domestically determined.
Americans like to slap the "made in China" label on their huge trade deficit. Yet not only is China's forecast current-account
surplus of around $100 billion this year only a fraction of America's likely deficit of $800 billion, but, as chart 1 shows, most of the increase in
America's trade deficit has come from outside China. The main cause of America's trade deficit is a lack of
domestic saving, not unfair Chinese competition. The deficit is thus made in America, not made in China.

A/B/K/S 12/34
Trade Deficits Answers
Floating the Yuan will not reduce the trade gaps between china and the international community. The proposed
tariffs and quotas only strain U.S. economy and violate Chinese trade agreements.
BARBOZA 2005 (David, The New York Times Staff writer, May 2, 2005, “China Trade Surplus With West Still Rising”, Online, Lexis-Nexis,//ADI-TEB)
Government officials in the United States and Europe are now considering tariffs or quotas to restrain the trade
growth. But late last week, Chinese government officials warned that such moves might violate trade agreements.
Some economists and trade officials caution that China's trade figures are often distorted or hard to analyze because of the way goods pass through intermediary trade
spots like Hong Kong, Taiwan and Singapore, and also because of the way they are tracked and recorded by Chinese customs officials. Vincent Chan, the head of China
research at Credit Suisse, said that China's surplus could be temporarily exaggerated because of the way some Chinese companies tally their inventories. He also
warned of currency speculation. President Bush, European Union officials and even the World Bank have in recent weeks
called on China to allow its currency, which is pegged to the dollar, to float more freely, which would most likely
allow it to appreciate. The hope among some economists and trade officials is that such a move would help shrink
its trade surpluses.
But some economists and trade experts doubt that a more freely floating Yuan would do much to reduce the trade
gaps with the West because American multinationals and consumers are tightly bound to China's export boom.
'Trade protectionism is an empty threat,'' said Andy Xie, an economist at Morgan Stanley. ''A lot of these goods
are made on consignment for multinationals. If there were punitive tariffs, American businesses would have to pay.
''Several investment banks now predict a currency change. ''We believe they will move sooner rather than later,''
said Frank Gong, an economist at J.P. Morgan Chase. A spokesman for China's central bank told Dow Jones last
week that such a change was not imminent. China has been reluctant to change its currency policy for fear of
harming its economy.
Revaluation will not shrink the deficit; consumers will only turn to other countries.
Reuters.com, 2005 (“Yuan revaluation won’t aid U.S. as thought”, 5/20/2005)
But Greenspan poured cold water on the idea that a revaluation will shrink a record bilateral deficit with China
that hit $162 billion last year. It will mean that suppliers will turn to other countries like Malaysia or Thailand for
cheap textiles and other goods that China now supplies.
"So essentially what we will find is we are importing from a different area but we'll be importing the same goods,"
Greenspan said. "The effect will be a rise in domestic prices in the United States and as a consequence of that, we will have
other impacts which I could trace through but I've fortunately run out of time in this question.

A/B/K/S 13/34
Manufacturing Answers
Floating Yuan does not lead to increased job markets in the US

Marshall and Weber 2005 (Randi and Lauren, Staff Writers, New York Newswire, “Made in China, felt in America;
Because the Yuan is undervalued, U.S. interest rates are low, but manufacturing is declining, so the push is on to get China to float its currency”, July 5, 2005, online,
Lexis-Nexis,//ADI-TEB)
More worrisome to some economists is the potential increase in overall consumer prices. "This is a very important
part of keeping our inflation down in light of all the oil price increases we've been seeing," said Jeremy Siegel, a
finance professor at the University of Pennsylvania's Wharton School of Business in Philadelphia. "We can't have
the threat of another inflationary factor coming from abroad." But the world includes far more than China and the United States, and the
other economic competitors from Asia and Europe, combined with a gradual revaluation, might make price gains moderate. That's especially true since
other Asian countries also peg their currencies, at least somewhat, to the dollar so they can remain competitive
with China. If China were to shift its Yuan, other countries would probably follow suit. That same international
story, however, may mean that there's little hope for a rebound in U.S. manufacturing, despite talk of new jobs and
new money flowing back into the United States with a Yuan shift. Greenspan has said revaluing the Yuan would
likely not create new jobs in the sector. "It's been 30 years since the peak of our manufacturing employment,"
Siegel said. "There are broad-based forces that are so strong, they're going to overwhelm anything that has to do
with the Yuan."
Appreciation of the Yuan would increase interests rates, not manufacturing.

CNN/Money, 2005 (Krysten Crawford, “Beware of (fixing) the China problem” 6/24/2005)
Also worth noting: China has become a big buyer of U.S. Treasury securities in recent years, which in turn has helped
the U.S. keep interest rates low and fund its ballooning trade and budget deficits.
While that means China has a vested interest in the overall health of the U.S. economy, it conversely gives
Americans an incentive not to anger the Chinese.
"Some observers mistakenly believe that a marked increase in the (yuan's) value relative to the U.S. dollar would
significantly increase manufacturing activity and jobs in the United States," said Greenspan. "I'm aware of no credible
evidence that supports such a conclusion."
China is not the cause of lost manufacturing jobs, US productivity, and less stringent labor regulations are.
Miles, Ph.D., Director of the Center for International Trade and Economics at The Heritage Foundation, Eiras, Senior Policy Analyst for International Economics
in the Center for International Trade and Economics at The Heritage Foundation, 2003 (“Undervaluing the Damage of a Tariff”, www.heritage.org, 5/3/2003)
According to the U.S. Department of Labor, manufacturing jobs have been declining for almost two decades, but not because of
increased trade with China. China is not the only country with cheaper jobs and lower manufacturing costs.
Mexico, several Central American countries, and some other Asian countries also have cheaper labor and
production costs than the U.S., and few would argue that this is due to an undervalued currency. The U.S. decline
in manufacturing jobs is the result of increased productivity. In plain English, with new technologies the U.S. is
producing more with less labor--an indication of economic health, not economic sickness.
The loss of manufacturing jobs also reflects a shift from a manufacturing-based economy to a service economy
based on human capital, akin to the 19th century shift from an agricultural to a manufacturing economy. Those losing jobs in manufacturing
can be trained for work in the service sector. Job creation in the services sector has increased by almost 70 percent
since 1991.
In addition, the loss of manufacturing jobs reflects choices made by Americans. For the past century,
manufacturers in the Northern states have complained about job migration to the South. To encourage economic
development and raise living standards, Southern states generally adopted less stringent labor, pro-union, and pro-
environmental regulations than their Northern neighbors, resulting in lower wages for employees and greater
flexibility and potential profits for employers. Today, when developing countries are faced with a similar choice
between stricter regulations or feeding people, regulations lose their attractiveness and wages remain lower.
Forcing unwanted regulation on these countries may stem job migration, but only at the cost of reduced economic
freedom and more hunger in developing countries.

A/B/K/S 14/34
AT: Chinese Economy
Floating rates squelch regional development.

Carsten Hefeker and Andrea Nabor, 2002, Fellows at Hamburg Institute of International Economics
“Yen or Yuan? China’s Role in the Future of Asian Integration,” www.hwwa.de, Pg. LN
These negative effects of floating rates are by definition more important for small open economies than they are for large
closed economies. It has been argued by several authors that the strategy of the East Asian economies to peg their currencies has been
pivotal for their rapid development up to the crisis.4 Recent years have seen a concentration of trading patterns within
East Asia (see section 3 below), so that regional exchange rate stability has become more important. In addition, as reported by
Kwan (2001), many of the Asian countries are close competitors, so that the danger of competitive devaluations and retaliatory measures
should not be taken too lightly. He consequently points out a strong correlation between movements of exchange rates and
growth developments in East Asian economies. A 1 percent appreciation of the yen against the US-dollar raises the growth
rate in the rest of Asian economies by 0.109 percent.
Further significant appreciation to the Yuan will have catastrophic impacts to Chinese economy and trade
AFX 2005 (AFX financial news service, August 2, 2005,” China official says large yuan move would be 'catastrophic' for economy”, online, Lexis-Nexis,//ADI-
TEB)
BEIJING (MarketNews) - A significant appreciation of the yuan would have 'catastrophic' consequences for the Chinese
economy, an official with the National Bureau of Statistics said.The warning underlines the concerns within the government about
the impact of exchange rate reform on Chinese economic growth and suggests that the yuan will not be allowed to
strengthen far beyond the 2.1 pct revaluation against the dollar announced at the end of last month. 'Too large an
appreciation of the yuan would push the Chinese economy into a catastrophic situation,' Liu Wenhua, director of the Urban
Survey Organization at the National Bureau of Statistics (NBS), told Market News International.Liu would not indicate the magnitude suggested by 'too large' a move,
though it is understood that Beijing is uneasy about allowing the yuan to strengthen significantly against the dollar, and that even last month's 2.1 pct move was pushed
through despite considerable opposition from within the government.
A appreciation of the yuan will create disinflation pressures.

Market News International, 2005 (“Large Yuan Move Would Be ‘Catastrophic’ For Econ”, lexisnexis.com, 8/2/2005)
A significant appreciation of the yuan would have "catastrophic" consequences for the Chinese economy, an official
with the National Bureau of Statistics said.
The warning underlines the concerns within the government about the impact of exchange rate reform on Chinese economic growth and suggests that the yuan will not
be allowed to strengthen far beyond the 2.1% revaluation against the US dollar announced at the end of last month. "Too large an appreciation of the yuan would push
the Chinese economy into a catastrophic situation," Liu Wenhua, director of the Urban Survey Organization at the National Bureau of Statistics (NBS), told Market
News International.
Liu would not indicate the magnitude suggested by "too large" a move, though it is understood that Beijing is uneasy about allowing the yuan to strengthen significantly
against the dollar, and that even last month's 2.1% move was pushed through despite considerable opposition from within the government.
Liu, whose department is responsible for compiling the consumer price index, one of the government's main indicators in deciding economic policy, said that even
the 2.1% strengthening against the dollar so far will "weigh down" domestic price growth and stir up
disinflationary pressures.
"The yuan revaluation will mean that China imports more and exports less, which will make the over-supply
conditions even worse and increase pressure on prices to move downwards," he said.
"Imported consumer products will be cheaper after the revaluation. Secondly, the yuan revaluation makes
imported raw materials and energy products cheaper, which relieves inflationary pressure as cheaper costs
translate into cheaper products."
His comments come amid a growing debate among government economists about the threat of China's expansion leading to massive overcapacity and, ultimately,
a return to the deflationary conditions which wracked the economy at the end of the 1990s.

A/B/K/S 15/34
AT: Chinese Economy
Floating Yuan causes increased pressure on trade goods and causes Chinese economy decline.
AFX 2005 (AFX financial news service, August 2, 2005,” China official says large yuan move would be 'catastrophic' for economy”, online, Lexis-Nexis,//ADI-
TEB)
Liu, whose department is responsible for compiling the consumer price index, one of the government's main indicators in deciding
economic policy, said that even
the 2.1 pct strengthening against the dollar so far will 'weigh down' domestic price growth
and stir up disinflationary pressures.'The Yuan revaluation will mean that China imports more and exports less,
which will make the over-supply conditions even worse and increase pressure on prices to move downwards,' he
said.'Imported consumer products will be cheaper after the revaluation. Secondly, the Yuan revaluation makes
imported raw materials and energy products cheaper, which relieves inflationary pressure as cheaper costs
translate into cheaper products.'His comments come amid a growing debate among government economists about the threat of China's expansion leading
to massive overcapacity and, ultimately, a return to the deflationary conditions which wracked the economy at the end of the 1990s.Liu said that China is unlikely to
return to deflation this year as rising services and utilities prices counter any impact from the fall in food and consumer goods prices. 'Even park admission tickets are
rising,' he said. 'As far as I am concerned, China's CPI growth in 2005 will fall within the official target of 4 pct and is unlikely to see negative growth in the second half
of this year.' Chinese consumer prices grew at 1.6 pct in June, year-on-year, compared with 1.8 pct growth during the two previous months and the recent high of 5.3
pct recorded last August. Although Liu remains sanguine about price growth with the yuan at the current level, others argue that the threat of
deflation is real, and that the government must be prepared to use policy tools meet the challenge. Justin Lin Yifu, a
Beijing University professor and a senior advisor to the government on macroeconomic affairs, told a conference over the weekend that the investment and
manufacturing boom is leading to massive overcapacity and that 'China is very likely to see deflation in the fourth quarter of this year or the first quarter next year
because this overcapacity is going to pull down prices.' Market expectations of a follow-up adjustment to the yuan's rate against the
dollar are rapidly fading, thanks in part to frequent communications from the government aimed at dampening
speculation. But there are widespread assumptions that Beijing will allow the currency to trade upwards within the constraints of the managed float regime that it
has just adopted. JPMorgan, for example, told clients that the government will allow the currency to gradually appreciate by 7 pct by the end of this year, including last
month's move, and by a cumulative 15 pct by the end of 2006. But even last month's revaluation was pushed through over considerable opposition from within the
government. Reports last week said that the People's Bank of China was forced to compromise at 2.1 pct, rather than the 5 pct that it had preferred. The NBS itself, in a
report published during the fevered round of revaluation speculation in May, that a revaluation of 3-5 pct would lead to export growth
falling this year to below 10 pct from last year's 35.4 pct while a 15 pct appreciation would see exports fall for the
first time since 1983. Even so, figures debated within China are dwarfed by the expectations of critics of China's currency regime, who maintained
prior to the July 21 announcement that the yuan is as much as 40 pct undervalued against the dollar. The currency rose
to 8.1046 yuan yesterday, the seventh day of trading since it was adjusted to 8.11 to the dollar.
China is unlikely to deflation now.

Market News International, 2005 (“Large Yuan Move Would Be ‘Catastrophic’ For Econ”, lexisnexis.com, 8/2/2005)
Liu said that China is unlikely to return to deflation this year as rising services and utilities prices counter any impact
from the fall in food and consumer goods prices.
"Even park admission tickets are rising," he said. "As far as I am concerned, China's CPI growth in 2005 will fall within the official target
of 4% and is unlikely to see negative growth in the second half of this year."
Chinese consumer prices grew at 1.6% in June, year-on-year, compared with 1.8% growth during the two previous months and the recent high of 5.3% recorded last
August.

A/B/K/S 16/34
AT: Chinese Economy
Further appreciation of the yuan would hurt the profitability of exporting industries.
Agence France Presse, 2005 (“Further yuan rise would affect corporate China’s finances: Fitch”, lexisnexis.com, 6/28/2005)
International ratings agency Fitch said Thursday that any further adjustments to the yuan following last week's revaluation would have far-
reaching implications for Chinese companies.
"If this initial modest revaluation is followed by future more substantial appreciation of the yuan, the impact on
the profitability, financial condition and competitive landscapes of numerous industries could be extensive," Fitch
said in a statement.
Another revaluation would mitigate the foreign currency-denominated liabilities of Chinese companies, with highly-leveraged sectors which borrow mainly in dollars or
other foreign currencies most affected.
However the effect on low-margin, export-oriented industries, such as textiles, electronic goods and other consumer
products, particularly in sectors where profit margins are low, would be "almost exclusively negative,"PRESSURE IS
INCREASING ON CHINA OVER THE YUAN
The Business Times Singapore, June 23, 2005 (“The yuan conundrum” LEXIS)
At the same time, the pressure to drop the currency peg is greater than ever before. Recent industrial output data had some observers saying that China may beat the
2005 economic growth targets. The government wanted the economy to grow 8 per cent - compared to the full-year 2004 figure of 9.5 per cent growth. Industrial output
rose 16.6 per cent in May over the same month last year, and a 16 per cent jump in April.

A/B/K/S 17/34
Russia Econ DA
Appreciation of Yuan aids Russian exports.

The Moscow Times, July 25th, 2005. “Moscow Calms about Stronger Yuan”
"Russia is trading above its potential with the European Union and below its potential with Asia, including China," said
Peter Westin, chief economist at Aton Capital. Greater appreciation of the yuan would protect domestic producers against
Chinese competition as well as boost Russia's wood, paper, chemicals and machinery exports to China, said
Westin.

A/B/K/S 18/34
Canada Econ DA
A rise in the value of the yuan will benefit Canadia’s overall economy
Hirsch, chief economist for the Canada West Foundation, 2005 (Todd, The Edmonton Journal: , “Western Provinces Should Keep Their Eyes on Red-Hot
China: Letting Its Currency Float Should Help Rebalance Trade Between Nations”, 7/31/05)
The first immediate effect will be to make imports from China relatively more expensive in Canadian dollar terms.
This is good news for Canadian companies that compete directly with Chinese companies, especially
manufacturers. The yuan's rising value is also good news for Canadian exporters.
As the yuan appreciates, Chinese purchasing power will rise, creating higher demand for Canadian exports to
China. As the Chinese economy grows and its consumers become wealthier, it will require much more of the raw
materials used as inputs in their factories and construction projects -- materials such as lumber, copper, nickel, aluminum, crude oil,
fertilizers, and coal. Who better to provide these than Western Canada?
And then there is the trade in business and personal services that will be affected by the higher yuan.
Canadian companies such as those in financial services, architecture, marketing, and engineering will surely
benefit from stronger purchasing power in China.
An increase in the value of the yuan will decrease Canada’s trade deficit.
Hirsch, chief economist for the Canada West Foundation, 2005 (Todd, The Edmonton Journal: , “Western Provinces Should Keep Their Eyes on Red-Hot
China: Letting Its Currency Float Should Help Rebalance Trade Between Nations”, 7/31/05)
Gradually, Western Canada's trade deficit with China should narrow, which is exactly the type of result that floating
currency regimes are intended to bring. When a trade surplus or deficit gets too far out of balance, a floating
currency will eventually act to correct it.
And as the new flexible currency works its magic, Western Canada's policy-makers and industry leaders must keep their eyes on China. The
opportunities are as great and vast as the country itself.

A/B/K/S 19/34
Japan Economy DA
A large revaluation would stall Japan’s economy.

The Nikkei Weekly, 2005 (“Yen may follow Yuan’s path”, lexisnexis.com, 6/13/2005)
Anticipating a possible yuan revaluation, Japanese firms are wary about the potential impact on the yen's movements against
the greenback.
Many currency market participants believe the yen will rise against both the dollar and the euro if China revalues
its currency.
Daisuke Uno, a market analyst at Sumitomo Mitsui Banking Corp., cited "close economic ties between Japan and China and their geopolitical proximity" as
precipitating a rising yen.
Furthermore, if the Chinese government accepts a more robust yuan, Japan's monetary authorities are likely to
face difficulties conducting market interventions aimed at curbing a strengthening yen.
As many Japanese companies conduct numerous dollar-based transactions, if the yen climbs sharply, Japanese exporters will see their
competitiveness plummet. Also, companies will experience "drops in their foreign-currency-denominated
investments, profits at affiliated firms, and in the dividends they pocket," warned a trading company official.
Some businesses have already begun to hedge against a spike in the yen against the dollar. TDK Corp., which conducts a large amount of dollar-based exports, has
begun to extend its export foreign-exchange forward contracts to six months ahead from three months.
But some believe that a yuan revaluation will weaken the yen over the medium to long term. If the revaluation is large, the Chinese economy
could enter a slowdown. In turn, Japanese exports to China would decline, causing the Japanese economy to stall
as well.

A/B/K/S 20/34
South Korea Economy DA
A revaluation of the Yuan will have a negative effect on South Korea’s economy.
Korea Times, 2005 (“Won Gains on Yuan Move”, lexisnexis.com, 7/23/2005)
China's revaluation of its currency will have negative impacts on South Korea's financial market as the won is
expected to strengthen sharply against the U.S. dollar and the stock market is expected to retreat from its recent
ascent.
Analysts said that a yuan revaluation will result in a further appreciation of the won, which will hurt the profitability of
Korea's exporters and worsen the investor sentiment in the booming stock market.
''The effects of a revaluation of the Chinese currency on the Korean economy and financial market are negative as
the currency market will use this opportunity to push the won up even more,'' said Shin Min-yong, senior economist at LG
Economic Research Institute (LGERI).
The won closed at 1,021.3 won against the dollar on Friday, sharply down 14.2 won from the previous day's close.
Shin said that a stronger yuan will also likely reduce Korea's exports to China, its largest export market, as a slowdown
in China's exports will demand fewer Korean parts and intermediary goods.

A/B/K/S 21/34
Solvency
Without adequate credibility regarding its OWN deficits, the United States will fail to persuade currency reform.
Morris Goldstein, October 1, 2003, Senior Fellow Institute for International Economics, Testimony before Subcommittee on Domestic and International
Monetary Policy, Trade, and Technology Committee on Financial Services.
Multilateral does not mean everybody but the United States. The United States also needs to do its part to contribute to
global adjustment by improving our savings- investment balance, and in particular, by adopting a workable plan to reverse the
now- projected long string of U.S. budget deficits. If we want other countries to act in a cooperative way on
exchange rate policy and in implementing macroeconomic polices to promote growth, we too must be willing to put
something positive into the package.
Free float of Yuan will be rejected by Chinese – proven in 2003.

Robert R. Ebert, Ph.D., March 2004, Buckhorn Professor of Economics “Dollars and Chinese Yuan”
During the late summer and early fall of 2003, U.S. Treasury Secretary John W. Snow put considerable pressure on China to permit the
RMB to float on currency markets and rise against the dollar. Even President George W. Bush, in a meeting with Chinese President Hu
Jintao prior to the APEC summit in October, urged China to let its currency submit to market forces. The suggestions were
rejected by the Chinese leadership (Day, A12).
Political pressure on the Bush Administration over the value of the Chinese currency is extensive. Secretary Snow
delivered a report to the Senate Banking Committee on October 30, 2003 in which he appeared to be more conciliatory
toward China by saying it is not manipulating its exchange rate. He stated that financial diplomacy was “the surest
course to get the result we want.” (Andrews).
No chance of pressuring china to float yuan

The Economic Times March 10, 2004
Any hopes that China would heed the subtle and not-so-subtle pressure to revalue/float the yuan have been
effectively scotched. On Sunday, the deputy governor of the People's Bank of China (the country's central bank) categorically
denied there was any move to revalue the yuan. And with that hopes that the world economy, currently winging its way to
revival, would have a smooth touchdown have been dashed. The yuan, also known by its newer name, renminbi, has been pegged at
about 8.28 to the dollar for the past several years. The result, in a scenario where the dollar has been steadily weakening,
thanks to a widening current account deficit and a growing budget deficit, has been a hugely under-valued yuan. In normal
circumstances, one would expect that as Americans demand more and more yuan to buy cheaper Chinese goods, free market forces would cause the value of the yuan to
move up vis---vis the dollar. The problem, however, is that market forces are seldom allowed free play in currency markets. Despite the breakdown of the Bretton
Woods agreement and the shift to floating exchange rates, governments everywhere intervene, to a greater or lesser extent, to influence the exchange rate of their
currencies. In the case of the yuan, the fear that revaluation would erode the competitiveness of Chinese goods in world
markets has meant that the government, through the country's central bank, has been intervening in the market. It has been buying up
dollars to keep the exchange rate of the yuan pegged at its existing value.
Tariffs to force floating of the Yuan cause a protectionist stance that hurts U.S. international economy
Marshall and Weber 2005 (Randi and Lauren, Staff Writers, New York Newswire, “Made in China, felt in America; Because the Yuan is undervalued, U.S.
interest rates are low, but manufacturing is declining, so the push is on to get China to float its currency”, July 5, 2005, online, Lexis-Nexis,//ADI-TEB)
Schumer and Sen. Lindsey Graham (R-S.C.) had proposed a bill that would impose a 27.5 percent tariff on Chinese
imports in an effort to force China to begin a revaluation. They agreed to delay a vote on the bill when Treasury Secretary John
Snow and Federal Reserve Chairman Alan Greenspan assured them progress was being made. Greenspan has
suggested such a tariff would imply a protectionist stance that could hurt the United States' place in the
international economy.

A/B/K/S 22/34
Solvency
Empirically protectionist measures against China do not work.

The Edge Singapore, 2005 (Andy Xie, “China: Fear not protectionism”, lexisnexis.com, 5/13/2005)
The European Union (EU) and the US are implementing anti-surge quotas on Chinese textile products. The US is threatening to impose a 27.5%
tariff on Chinese imports unless China increases the value of its currency. The fear of 1930s-style protectionism is
intensifying, but I believe protectionism is not a major threat. The global division of labour has become so advanced
that the cost is too high for any major economy to withdraw from the global trading system. Bilateral trade
protectionism does not work, as trade is multidimensional and hard to stop by cutting off one trade link.
In my view, the anti-surge quotas on Chinese textiles will not work as they would only shift the market share from China to other emerging economies. The gaining
emerging economies would likely import raw materials from China. The quotas would only increase prices for consumers in the EU and the US without benefiting their
producers. It won't be long before these quotas are scrapped.
Protectionism has marginal effect on trade
China has suffered more from protectionist measures than any other economy in the world. From 1995 to 2004, 15.5% of the
anti-dumping cases were against China. Its exports rose 4.9 times and share in global trade rose from 2.5% to 6.7% during this period. China's export success
despite the protectionist measures demonstrates that these methods are not effective.
The key to China's success is its size. It has the capability to manufacture every product on a bigger scale than
anyone else. Hence, its cost structure is lower than other developing countries that have lower wages. So, when an
economy imposes trade barriers to protect its own industries, it would still want to import what it does not produce
at the best value. China is there to meet such demand. This is why China is unstoppable unless the world agrees to
shut down trade. Protectionism against China is mainly a developing-country issue. The emerging economies account for less than one-third of China's exports
but two-thirds of the anti-dumping cases against China. This is natural as many developing countries are at a stage of development similar to China's. India, for
example, has filed the most anti-dumping cases against China. Thirty-eight per cent of Turkey's anti-dumping cases are against China.
Despite the protectionist measures, the division of labour among developing countries is evolving. China's exports to India, for example, rose 10 times to US$5.9 billion
and imports 23 times to US$7.7 billion between 1994 and 2004. The reason is that any export-oriented economy faces competition in third markets. Bilateral
protectionism decreases the overall competitiveness and does not work.

A/B/K/S 23/34
Solvency – Modelling
Recent shifts to floated rates doesn’t ensure compatability from Asian countries.
Whatever one thinks about the relation between trade and monetary integration (and thus the choice of member countries to any
regional integration project), the alternative suggested to more stable currency relations is more flexibility. But this is something
most countries are not willing to contemplate. Even countries that claim to have flexible rates place more or less value on fixed
rates and intervene to stabilize their exchange rates. This has become known as the "fear of floating" (Calvo and
Reinhart 2000). Thus, while there are good arguments to argue in favor of more flexible rates (Larrain and Velasco 2001), it seems that most countries
are simply not willing to go down this road. There are in fact only a limited number of countries willing to let their
currencies float, and few if any of them are small open economies, greatly exposed to international trade. The fact that the
flexibility between some of the Asian countries has increased post-1997 (Eichengreen 2002) is no proof that the Asian
economies have given up fixed rates for good. Baig (2001) observes that East Asian currencies show some flexibility, but argues that they continue
to smooth their exchange rates against the dollar.10 Fabella (2002) supports this observation.

A/B/K/S 24/34
Relations Links
Currency devaluation pressure makes China sweat and exacerbates relations mistrust
The National Journal July 16, 2005, “Self Confident China,” pg. LN
The weather is always uncomfortably hot this time ofyear in northern China, and the forecast is for more of thesame: a long, hot
summer, both here in China's capital and inU.S.-China relations.The Chinese resent growing pressure from
Washington torevalue their currency, the yuan. They worry about mountinganti-Chinese sentiment in Congress.
They anticipate potentialbilateral friction over North Korea and over China's lengtheningeconomic and diplomatic
shadow in East Asia. And, said WangJisi, dean of the School of International Studies at BeijingUniversity, "there are
deep-rooted suspicions of U.S.intentions."
US pressure angers Chinese citizenry – this forces the Chinese to get frosty; hurts currently ambiguous relations.
Such anti-Americanism among the public clashes with viewsheld by Chinese elites here, who seem satisfied with the
statusquo. They readily acknowledge that China has benefited from theopen markets and regional stability
afforded it by America'seconomic and military hegemony around the world. And, given allof China's internal problems, they
maintain that China has noreason to challenge the United States for at least 20 years. But chastened by the Chinese public's recent outburst
ofanti-Japanese sentiment, which led to an ugly confrontationbetween Beijing and Tokyo, these elites caution
Americans thatthey cannot assume that Beijing can conduct Sino-Americanrelations while ignoring domestic
public opinion."China is increasingly pluralistic," Wang warned, "and thegovernment has to listen to the people
more intensely." Thatdoesn't bode well for relations with America.To avoid future tensions, said Jin Canrong, associate
deanof the School of International Studies at Beijing's RenminUniversity, "the most important thing is for the United Statesto accept the
legitimacy of rising Chinese power."In recent times, successive U.S. administrations haveaccepted the reality of growing Chinese power only
begrudgingly.Bill Clinton took office promising to get tough on Chinesehuman-rights abuses. Only after several years of frostyrelations did Washington take a more
accommodating stance.
China’s increased investment opportunities with Venezuela and Sudan tank relations with the US in an
unprecedented manner.
In the long run, China's investments in other parts of theworld -- buying up oil leases in Sudan, raw-materials deals
inBrazil -- may create even more of a strain on Sino-Americanrelations. These deals involve China in Africa, Latin
America,and the Persian Gulf to an unprecedented extent, for the firsttime giving Beijing a stake in the longevity
of regimes that areat loggerheads with the United States. The Chinese say they haveno choice, given the raw-
materials needs of their burgeoningeconomy. But Beijing's coziness with Venezuelan President HugoChavez, for
example, a bete noire in Washington, won't improve relations with the United States.

A/B/K/S 25/34
MCR CP
A multilateral currency regime allows monetary legitimacy in Asia and also creates stable monetary unions that
avert fiscal crises.
We would suggest that the Asian economies adopt a mechanism similar to the ERM in which there is a multilateral grid to
which the countries peg their currencies. The ERM had been designed in such a way that individual countries
received a certain weight in a basket currency, the ecu, whose value was determined by the sum of the individual
currencies. Countries defined a peg against this basket that should be kept constant. A band around the target value was defined in which the currency could float.
If individual currencies hit the bands, intervention of the individual country was needed, but others should intervene as well. The attractive feature of the
ERM is that the relative weights of the currencies could change over time, implying in this case that the weight of the German mark
increased. In addition, the system acquired new members over time, since the UK, Spain, Portugal and Greece joined later. Moreover, countries could have different
corridors around their target values; the majority had defined that to be at ±2.25 percent, some countries had ±6 percent. The system has obviously been
sufficiently flexible to account for these changes and differences. Still, a common objection against a system like this is that the ERM has
indeed been subject to occasional crises (most notably in the aftermath of German unification). Eichengreen (2002) argues that the ERM only
gained credibility when it became clear that it was a stepping stone to full monetary union. While it is certainly
true that a system is strengthened if there is a clear political will to reach a more ambitious goal, like monetary
union, one should not overlook that the ERM has existed more than 10 years without a fixed time-table for EMU.
Multilateral monetary policy checks against undervaluation.

The main problems of the "early" ERM have been large and only slowly converging inflation differentials (Gros and Thygesen 1998). Germany (followed by Belgium
and the Netherlands) had relatively low rates while other members took considerable time to reach these. The ERM clearly increased its role over
time as it became more and more a coordination mechanism and a nominal anchor for member states. Realignments
were nevertheless necessary from time to time to account for real overvaluations due to higher rates of inflation. Thus, the ERM served the function of nominal anchor
by also keeping an eye on competitiveness issues.14 Only after convergence had been more or less completed, realignments stopped. Between 1987 and 1992 there
were no more realignments, i.e. even before the ratification of the Maastricht treaty with its fixed time-table for EMU this could be achieved. This last period
also saw an extension of the mutual financial support agreements for defending individual pegs. More generous
financial support lines were probably connected to the convergence and thus a lower chance of actually being
forced to use them.
An ERM regional monitary system solves monetary credibility and is solved by all regional members.
A functioning regional monetary system will therefore be characterized by some pressures and some need of
adjustment mechanism to account for asymmetries. But this is well compatible with our idea of making the system flexible
enough to be able to account for changing relative weights of the currencies involved. This would be necessary to include the
Chinese RMB in the system as well. Instead, the Asian monetary cooperation would most likely imply a float against the US dollar and the euro. Thus, we would
argue that the ERM could be a model for the Asian economies. Especially the post-1992 ERM has been an exchange rate system that has
combined stability with enough room for mild fluctuations of the exchange rate. In this respect, Braga de Macedo et al. (2002) stress the positive
influence of the mutual surveillance framework which has ensured that policies were pursued compatible with the
stability of exchange rates. In fact, some coordination mechanism might greatly help to increase the credibility of
such pegs. Such mechanism might be in line with former experiences of ASEAN member countries with joint committees and regional forums, such as the Manila-
group, although they would need to get more binding force against national decisions. An Asian monetary system might provide for some
degree of cooperation to begin with and provide enough flexibility for more elaborate and ambitious cooperation in
the future. In addition, there should be a mechanism for financial support, it has been argued (Eichengreen 2002).

A/B/K/S 26/34
MCR CP
Full regional integration is only possible under ERB controls – it’s the only way to restore credibility in exchange
rates.
The prospects for an immediate full monetary integration among the Asian currencies are, at the moment, not very
bright. However, flexible rates are obviously neither the choice of most of the Asian countries. But whereas the Asian currencies
have been pegged to the dollar in the past, this is no longer a solution for the future. The dollar is losing ground because trade shift away from the US
towards more regionally concentrated trade. The yen is also not likely to assume the role of the dollar. Apart from political reasons, the Japanese economy is likely to
lose relative weight against the Chinese economy. Although China is not yet the regional dominant economic power, it is very
likely to grow into that role. The gradual opening of the Chinese economy to the outside world suggests this. This prospect must be taken
into consideration when planning such a long-term project as monetary cooperation. Given that flexible rates are
no alternative and that neither the dollar nor the yen are appropriate to serve as anchor currencies, the alternative
is a more symmetric monetary system, such as proposed in a common basket peg with sufficiently wide margins of fluctuations. Drawing on
experiences within Europe, we consider something like an Asian monetary system as workable alternative that
would build on the experiences with the EMS. The comparison with Europe should not be taken too far, however.
Such a regional integration seems to be more adequate for the Asian economies than any suggestions that focus on
outside currencies (such as the dollar) or one particular currency of the region (the yen). A common peg would be more
adequate economically and much easier to implement politically.
Chinese leadership is key to stabilize the monetary climate of Asia under ERM.
We leave it open whether such a peg should from the very beginning include all ASEAN+3 currencies. Their relative
weight should be open to adjustment to account for changes in the relative weight of the economy concerned and for further members of the system. This would
allow in particular China to assume a gradually increasing importance, reflecting its growing role in international
and Asian trade and investment. This, however, would imply a decreasing weight of the Japanese yen in this basket. It is
open to speculation whether that would be an agreeable option for Japan, perhaps with the optimism to maintainits economic importance in the region, or whether Japan
would prefer to stand apart of such an arrangement, similar to the UK in Europe. In any case, it seems clear that Japan could not be the anchor of such a system, nor
could the RMB take this role immediately. The Chinese currency can only grow into this role through an evolutionary process.
In that perspective, an Asian ERM would be a much more symmetric system than the European ERM.

A/B/K/S 27/34
Reg-Neg CP
Government-business consultations are wanted by the Manufacturing sector.

Commerce Department, January 2004. “Manufacturing in America,” http://www.ita.doc.gov/media/Publications/pdf/manuam0104final.pdf
Many roundtable participants thusrequested the establishment of a manufac-turing-related position within the
Com-merce Department at the assistant secre-tary level or higher to focuson manufacturing competi-tiveness and the
health ofthe manufacturing sector ingeneral. Manufacturers alsourged stronger coordinationboth within the federal gov-ernment
and with state andlocal governments to fosterinvestment in manufacturing, as well asrequesting a regular dialogue
betweengovernment and the manufacturing sectoron its competitive challenges.The administration has thereforeproposed creating an
assistant secretaryfor manufacturing and services whowould develop and implement a compre-hensive strategy on
manufacturing. Whilemaintaining a focus on manufacturing,strategic planning must include the serv-ice sector, which both
influences andbenefits from the manufacturing sectorâ€™scompetitiveness.

A/B/K/S 28/34
Politics – Plan is Bipart
Bi-partisan support for revaluation of yuan.

International Herald Tribune, August 5th, 2005. “Around Asia’s Markets,” pg. LN
Schumer, a New York Democrat, and Graham, a Republican from South Carolina, authors of a bill that would impose sanctions
unless China lets the yuan rise, said the central bank's comment that it won't shift the yuan again in the ``foreseeable future''
was ``disappointing.'' Schumer and Graham said they would renew pressure for a tariff if China's central bank doesn't take additional steps.Thirty-five
U.S. legislators signed a petition in May that said the yuan is 40 percent undervalued. Schumer declined to
comment when asked at a July 28 press conference in Washington what yuan exchange rate would satisfy
him.Pressure for a stronger currency must be weighed against concerns China may slow purchases of U.S. Treasury notes, former U.S. President Bill Clinton said in
an interview in New York. Chinese investors, including the central bank, are the second- largest foreign holders of Treasuries, according to the U.S. Treasury
Department.``In theory, I would very much like to see their currency rise, and I would like to see American
manufacturing become slightly more competitive,'' Clinton said.
Ending Chinese currency manipulation benefits all Congressional members.

SENATOR LINDSEY GRAHAM (R-SC) AND SENATOR CHARLES SCHUMER (D-NY) , July 28, 2005 Thursday, CHINESE CURRENCY
REVALUATION LOCATION: SENATE RADIO/TV GALLERY, THE CAPITOL, WASHINGTON, D.C.
Look at the politics in the Senate and the House. Look how it's changed in the last year regarding China. Every House
member and every senator who listens is hearing a common problem with China -- with its currency manipulation,
intellectual property theft, transshipment of goods. The Congress, the vote we took in the Senate, where 67 senators refused to table our
amendment, was a sea change in the Senate. What happened in the House last night and a couple of days ago I think is a sea change in the
House.The Congress is getting very impatient with China's refusal to come within international norms on a variety
of issues. We're focusing on currency, but this problem is deep and it's widespread with China, and it's beginning
to surface at every stage in Congress.

A/B/K/S 29/34
Politics – Plan is a Win
Revaluation is Bush’s main priority. It’s a win for him.

The White House has been pressing Beijing to revalue China's currency, the yuan, for quite a while. Last week, it got a little of
what it had asked for. Beijing announced a new currency-management system, and as part of that reform increased the yuan's
value by a little more than 2 percent against the dollar. The White House greeted this change as a step in the right direction. But a few
months from now, is America going to like the results? Maybe not.
Elimination of piracy is Bush’s ground – it’ll be a win.

Commerce Department, January 10th, 2005, “November’s Presidential Election…,” pg. LN
http://www.commerce.gov/opa/press/Secretary_Evans/2005_Releases/January/10_China_relations.htm
Also during his visit to Beijing, Evans will meet with senior Chinese government officials to discuss ways China can further
follow through with commitments they have made to eliminate piracy and open the China market to U.S. goods
and services.Evans' visit underscores the Bush Administration's continued commitment to aggressively address
issues that inhibit free and fair trade with China and to build an enduring economic partnership that will help bring jobs and economic prosperity
to both countries.

A/B/K/S 30/34
Politics – Manufacturing Lobby Likes Plan
Manufacturing lobby support yuan revaluation.

A bill to impose a 27.5 pct tariff across the board on Chinese imports if Beijing did not revalue the yuan within six
months had been scheduled go before Congress for a vote. But it was shelved just before China allowed the yuan to appreciate by 2.1 pct on
July 21, ending the 11-year peg to the US dollar.US manufacturers, hard hit by low-cost imports, still argue that the yuan is
undervalued by 25 to 40 pct against the dollar, giving China an unfair trade advantage.
Manfacturing lobby likes trade policy enhancing US competativeness.

Manufacturers perceived a lack offocus within government on manufactur-ing and its competitiveness.
Manufacturers are looking for a commitment to un-derstanding the challenges that the sectorfaces in competing in
a rapidly globaliz-ing economy. They want government totake the steps needed to foster the manu-facturing sectorâ€™s ability to adjust to thatnew
competitive reality Manufacturers want the government to focus on encouraging stronger economic growth both at home
and abroad. There is a broad understanding that the recent recession was led by asharp drop in business investment andthat both monetary policy and fiscal pol-
icy have worked to set the economy onthe route to recovery. But there are stillsteps that manufacturers feel are necessaryto
encourage business investment, and toreinforce the recovery under way in the economy as a whole and in the
manufac-turing sector in particular. Manufacturers see the need forgovernment to match the effort that theyhave
made in controlling manufacturingcosts. As manufacturers have focused onreducing costs to improve productivityand ensure their competitiveness,
theyoften find their efforts eroded by coststhey cannot controlâ€”costs that result in part from government policy.
Manufactur-ers seek a commitment on the part of gov-ernment to reduce those costs and, in theprocess, create an
economic environmentthat is attractive to investment in manu-facturing within the United States
Manfacturing lobby likes skilled labor training – plan is a win for them.
Manufacturers regarded educationas crucial. Manufacturers are extremely in-terested in addressing the
shortcomings ofthe U.S. educational system. Roundtableparticipants underscored that the evolvingnature of the manufacturing sector
relieson individuals entering the workforce withgreater problem-solving abilities. These workers must continually
sharpen theirskills through lifelong learning. In addi-tion, roundtable participants expressed concern that the United
States risks losingan innovation infrastructure if the nationfails to produce scientists and engineers.Manufacturers
seek a renewed emphasisfrom all levels of government to invest ineducational and training institutions.
Manufacturing lobby hates trade barriers with China – hurts their prices.
Manufacturers also focused on theneed for international trade and monetarypolicies that ensure that global
competi-tion in manufacturing is free, open, andfair. Many manufacturers expressedconcerns regarding China.
What manufac-turers seek is not protection from compe-tition, but the ability to compete on equalterms. Toward that
end, they stronglysupport leveling the playing field interna-tionally by lowering barriers to trade andeliminating
efforts by foreign govern-ments to confer unfair competitive advan-tages for their manufacturers.

A/B/K/S 31/34
Politics – Manufacturing Lobby Likes Plan
Manufacturing lobbies like plans that increase demands for US goods – plan will help them.
Manufacturers attending the roundtables indicated that the single most impor-tant economic policy objective from theirperspective was encouraging economicgrowth.
Stewart Dahlberg of J.D. Street &Co. described the reality of the global mar-ketplace at the St. Louis, Mo., roundtable:The world is a very big place. There are lotsof
customers out there and lots of niche cus-tomers to find. What we would . . . simplyask [is] that every possible opportunity toopen up every single possible market be
inves-tigated and called out anywhere you can.Although many of the specific con-cerns raised by manufacturers focused onthe
effect of indirect costs onthe supply side of the eco-nomic equation, no one dis-agreed with the notion thatthe first
and most pressingissue was sufficient demand,domestically and globally, tostimulate purchases by con-sumers and businesses of thegoods that
U.S. manufacturers produce.Manufacturers recognized that themost recent recession was one driven by asharp decline in
business investment,rather than a drop in consumer spending.They also understood that policies de-signed to
encourage business investmentwere essential to any recovery in manu-facturing. Most manufacturers indicatedthat recent efforts to
stimulate the econ-omy were paying off, even though theyhad not fully filtered through to themanufacturing sector. As Mustafa Mo-hatarem of General Motors put it at
theroundtable in Washington, D.C., the re-cent passage of the Jobs and Growth Tax

A/B/K/S 32/34
Politics – Manufacturing Lobby Has No Power
Manufacturing influence is minimal in public and political affairs.

The roundtable participants attrib-uted some of the publicâ€™s misperceptionabout manufacturing to the lack of
focusin government on manufacturing. Theypointed out that there was no single advo-cate for manufacturing within the
execu-tive branch departments. I think theUnited States is the only country in theG8 which doesn’t have a very-
high level department of manufacturing. said BobBrunner of Illinois Tool Works at theRockford, Ill., roundtable. â€œI think that[establishing such a
department] would bea real positive development in terms ofsupporting us manufacturers.â€Manufacturers expressed frustrationthat there was
no focal point for themany programs that government supportsat the federal, state, and local levels to as-sist
manufacturers. Bruce Thompsonpointed out that there was no â€œseamlessinterface.â€ What was needed, in his view,was â€œa one-stop shopping mentality,â€
sothat manufacturers do not have to call ona lot of different organizations to get theinformation and assistance that theyneed. As Von Hatley of the Louisiana De-
partment of Economic Development putit at a roundtable in New Orleans, â€œWe re-ally need a concerted effort between fed-eral and state [governments] to do what
ittakes to save manufacturing.â€ To ensureaccountability, manufacturers sought theestablishment of a single office
withingovernment with responsibility for imple-menting the Manufacturing Initiative.Historically there has been
little insti-tutional focus on manufacturing in thefederal government. Although variousagencies take into account
elements ofmanufacturing competitiveness, in practicethere is no mechanism to coordinate these efforts. While it is
widely understood thatthe Commerce Department serves as theprincipal advocate for manufacturingâ€™s in-
terests, there is no office in the CommerceDepartment that is solely responsible forlooking out for the
competitiveness of U.S.manufacturing.

A/B/K/S 33/34
Politics – Manufacturing Lobby Hates Plan
Small business manufacturers hate social sphere regulations – plan would piss them off.
At the roundtables, manufacturers frequently mentioned the issue of regula-tory costs and the relative burdens theyplace
on U.S. firms versus their competi-tors. An OMB study found that regulatorycosts were 3.7 percent of GDP in 1997.13Since manufacturing
tends to bear agreater share of regulatory costs thanother sectors, it is safe to assume thatroughly 4 percent of
manufacturing GDPgoes to compliance. Of this, about half of he cost is for compliance with environ-mental
regulations; the remainder is forcompliance with workplace safety andproduct safety requirements, as well as forthe time
spent filling out government pa-perwork and keeping records.One measure of the economic cost ofcompliance is the cost to
government ofmanaging regulatory programs and theconsequent drain on tax revenues whichthat effort
represents. Total federal budgetoutlays for regulatory compliance activi-ties have almost doubled in the past 13years, from $13.7 billion in 1990 to $26.9billion in
2003 in real terms.14Those costscover all regulatory activities, from tradeand customs, to consumer safety, to secu-rities laws. They do not include the costto the private
sector of compliance, whichcan be many times greater.From a manufacturerâ€™s perspective,particularly that of a small or
medium-sized business, the most common compli-ance costs are related to environmentalregulation, workplace safety, and
tax com-pliance/employment rules. The SmallBusiness Administrationâ€™s Office of Advo-cacy has conducted the most comprehen-sive study of those costs.15The
studyfound that the total cost of complyingwith regulations in those areas in 1997amounted to $147 billion annually, or acost per employee of $7,904. Of the indi-
vidual categories that made up that total,environmental compliance costs took thelargest share. Environmental costs ac-counted for nearly 50 percent of the total:$69
billion in 1997, or a cost per em-ployee of $3,691.16Significantly, the cost of compliancewith such rules falls hardest on
businesseswith fewer than 20 employees. Accordingto the SBA study, small manufacturingbusinesses reported that compliance withworkplace rules
amounted to a cost of$16,920 per employee. For larger firms,that cost dropped by more than half, to$7,454 per employee
Compliance costs are high than income now – manufacturing sector would hate you plan.
Further, taken together, all compli-ance costs appear to have increased sig-nificantly since the SBAâ€™s study of 1997data.
According to a recent NAM study,the total burden of environmental, eco-nomic, workplace, and tax compliance is$160 billion
on manufacturers alone,equivalent to a 12-percent excise tax onmanufacturing production. This reflectsan increase of about 15 percent
over thelast five years.18In short, regulatory com-pliance costs are rising faster than incomein the manufacturing
sector, which im-plies a loss of cost competitiveness or, ata minimum, a negative offset to the ben-efits of the
extraordinary productivitygains and efforts by manufacturers to cutcosts under their direct control
Rising energy costs due to plan anger the manufacturing industry.

Another point of concern for manu-facurers is the rising cost of energy, partic-ularly natural gas. Manufacturers
dependon affordable, reliable energy. Industry uses more than one-third of all the energyconsumed in the United
States, the major-ity of which is natural gas and petroleum,followed by electricity. In all sectors, en-ergy prices have a
significant effect on op-erations and product prices.Manufacturers uniformly criticizedthe failure to enact the
legislative aspectsof a comprehensive and coherent energyplan that would increase America’s energy independence
while yielding energy pricesthat would help ensure manufacturers long-term competitiveness. Don Wain-wright of
Wainwright Industries put it instraightforward terms at a roundtable inSt. Louis, Mo., explaining that manufac-turing is â€œone of the biggest
users of en-ergy.â€ He emphasized that, in his view,the biggest challenge facing his industry isâ€œenergy policy, which is
before the Senateright now.
Tax code changes anger the Manufacturing industries.

Commerce Department, January 2004. “Manufacturing in America,” http://www.ita.doc.gov/media/Publications/pdf/manuam0104final.pd
Manufacturers explained that theother forces inhibiting investment are re-lated to the general uncertainty
regardingthe strength of the recovery, concerns re-garding the effect of the events of Septem-ber 11, 2001, the rising cost of security
intheir aftermath, and to the more uncertaininternational economic environment. How-ever, the one concern
manufacturers identi-fied that is entirely within the control of the federal government is the uncertaintycreated by
frequent changes in the tax codeand the often-conflicting policies that thetax code represents. U.S. manufacturers puta
premium on getting the right rules andrates in place and then making them per-manent so businesses can invest withgreater certainty in terms of the treatmentof income
earned on their investments.

A/B/K/S 34/34
China Threat K Links
Washington is making China the scapegoat of their economic and social problems.
Asian Tribune, 2005 (John Chan, “US Pressure Continues Over Value of Chinese Currency” 7/30/2005)
The yuan revaluation question illustrates the tendency in Washington and other capitals to scapegoat “unfair
competition” from China for the economic and social problems at home. The arguments of the anti-China lobby,
however, do not stand up to scrutiny. The value of the yuan has not altered since it was first pegged. The decline of manufacturing jobs in
the US is primarily due to new technologies being utilized to shed labor, or the transfer of production overseas by
American corporations to exploit cheaper labor and resources. The result has been the emergence over the past
three decades of a highly integrated, globalized network of production.

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ADI 2k5 Currency Neg

DON’T CALL IT A COMEBACK

The economy will continue to grow stronger in the coming months.

The strong economy is showing staying power.

DON’T CALL IT A COMEBACK

DON’T CALL IT A COMEBACK

Revaluing the Yuan causes rising prices, inflation

DON’T CALL IT A COMEBACK

DON’T CALL IT A COMEBACK

Textile industry will receive losses of up to 60% due to revaluation.

DON’T CALL IT A COMEBACK

A wide swing in yuan value would cause havoc on the market.

DON’T CALL IT A COMEBACK

Revaluation would lead to higher interest rates in the US.

DON’T CALL IT A COMEBACK

Revaluation of will lead to higher interest rates

DON’T CALL IT A COMEBACK

DON’T CALL IT A COMEBACK

Deficit solvency fails – China accounts for little of trade problem.

Inflating Yuan is not enough to counterbalance U.S. Trade deficit

China is not the cause of the US trade deficit.

DON’T CALL IT A COMEBACK

DON’T CALL IT A COMEBACK

Floating Yuan does not lead to increased job markets in the US

Appreciation of the Yuan would increase interests rates, not manufacturing.

DON’T CALL IT A COMEBACK

Floating rates squelch regional development.

A appreciation of the yuan will create disinflation pressures.

DON’T CALL IT A COMEBACK

China is unlikely to deflation now.

DON’T CALL IT A COMEBACK

DON’T CALL IT A COMEBACK

Appreciation of Yuan aids Russian exports.

DON’T CALL IT A COMEBACK

DON’T CALL IT A COMEBACK

A large revaluation would stall Japan’s economy.

DON’T CALL IT A COMEBACK

DON’T CALL IT A COMEBACK

Free float of Yuan will be rejected by Chinese – proven in 2003.

No chance of pressuring china to float yuan

DON’T CALL IT A COMEBACK

Empirically protectionist measures against China do not work.

DON’T CALL IT A COMEBACK

DON’T CALL IT A COMEBACK

DON’T CALL IT A COMEBACK

Multilateral monetary policy checks against undervaluation.

DON’T CALL IT A COMEBACK

DON’T CALL IT A COMEBACK

Government-business consultations are wanted by the Manufacturing sector.

DON’T CALL IT A COMEBACK

Bi-partisan support for revaluation of yuan.

Ending Chinese currency manipulation benefits all Congressional members.

DON’T CALL IT A COMEBACK

Revaluation is Bush’s main priority. It’s a win for him.

Elimination of piracy is Bush’s ground – it’ll be a win.

DON’T CALL IT A COMEBACK

Manufacturing lobby support yuan revaluation.

Manfacturing lobby likes trade policy enhancing US competativeness.

DON’T CALL IT A COMEBACK

DON’T CALL IT A COMEBACK

Manufacturing influence is minimal in public and political affairs.

DON’T CALL IT A COMEBACK

Rising energy costs due to plan anger the manufacturing industry.

Tax code changes anger the Manufacturing industries.