Despite US Secretary of State Hillary Clinton's insistence that recent US actions regarding China will not trigger a trade war, Chinese Premier Wen Jiabao stated that China would keep its currency stable in order to protect exporters and ''its shares in the global market".
At the same time, the People's Bank of China said that blaming China's 'undervalued' currency will not solve US domestic problems such as high unemployment and huge trade deficits, nor will it reduce the trade imbalance between the two countries.
US Treasury department decided to delay the semiannual report on China’s Yuan policy on the same day (October 11) that US Senate voted on a bill that allows Washington to impose punitive tariffs on Chinese exports if it does not 'realign' its currency.
China’s Foreign Ministry spokesman Ma Zhaoxu, said China considers the bill "trade protectionism and a serious violation of World Trade Organization rules".
The chances of the Senate bill to actually become law are slim since the White House and the Republican-controlled House of Representatives are, unusually, in agreement that the bill would lead to a damaging trade war.
White House Press Secretary Jay Carney expressed his concern for the possible inconsistencies with US trade obligations by stating "Aspects of the legislation do raise concerns about consistency with our international obligations."
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