SHANGHAI, Aug. 18 (SMM)--Ahead of US Vice President Biden's visit to China, the median price of the RMB against the dollar hit record highs for five consecutive days, with the U.S. dollar-yuan exchange rate quoted at 6.3894 by the end of trading on August 17, up 225 from a week ago. Biden is expected to force RMB to appreciate during the visit.
US Vice President left Washington Tuesday for a visit to China, and RMB exchange rate is going to be a key topic for discussion. During his meetings with Chinese leaders, Joe Biden is expected to press China to reassess the RMB exchange rate. Before this visit started, the US Department of the Treasury reiterated in a briefing that RMB is greatly devalued. According to a report released by a Washington-based think tank, the RMB exchange rate issue mainly affects low-to-medium income workers and that if the Chinese currency is revalued, the US GDP can grow by 1.9% and 2.25 million jobs can be created. Some Americans believe that US trade deficit towards China can be corrected if RMB is significantly appreciated, and their employments will improve.
The RMB exchange rate has become a hot political issue in Sino-US trade relations at present. Regardless if the US views are appropriate, the US politicians will continue to exert pressures on RMB to win their voters before the presidential election 2012. China's July trade surplus rose unexpectedly to a 30-month high USD 31.48 billion, well above the expected USD 27.5 billion. Strong export growth and the large trade surplus indicated room for further appreciation against the dollar over the rest of the year.