Washington, D.C. — Today, Senators Ted Budd (R-NC) and Joe Manchin (D-WV) introduced the Chinese Currency Accountability Act. They were joined by Senators John Barrasso (R-WY), Katie Britt (R-AL), Mike Braun (R-IN), and Joni Ernst (R-IA).
The bill requires the Secretary of the Treasury to oppose any future International Monetary Fund (IMF) elevations of China’s official currency, unless the communist nation undertakes major economic reforms.
The House bill was led by Rep. Warren Davidson (R-OH).
Background:
- In 2016, the Chinese renminbi (RMB) officially joined the International Monetary Fund’s (IMF) elite currency basket, which determines the value of the IMF’s Special Drawing Rights (SDR).
- The RMB now sits in an exclusive club with the dollar, euro, pound, and yen.
- Last year, the IMF increased the weight of the RMB in the SDR basket again, making it the third-most prominent currency in the basket behind the U.S. dollar and euro.
- The IMF made this move despite China’s lack of an independent central bank and non-transparent monetary policies.
- The Chinese Currency Accountability Act requires the Treasury Secretary to oppose any future increase in the RMB’s weight in the SDR currency basket, unless China undertakes profound economic reforms.
Sen. Budd said in a statement:
“The IMF’s boost of China’s official currency represents a threat to the international financial system and the U.S. dollar. Unless the Chinese Communist Party undertakes significant reform of their economic system, our country should oppose any further strengthening of their currency.”
Sen. Manchin said:
“The United States cannot be complacent with the People’s Republic of China’s lack of transparency in their monetary policies. This bipartisan legislation will protect our financial credibility by opposing any efforts to bolster the weight of the PCR’s currency until they implement much-needed economic reforms. I urge my colleagues on both sides of the aisle to support this commonsense bill to strengthen our global economy.”
Sen. Barrasso said:
“The Chinese Communist Party fails to abide by the global economic rules but wants the yuan to be the global currency. China continues to manipulate its currency and exploit international financial markets. Our nation must push back against international financial institutions legitimizing China’s official currency. Our legislation is a critical step to ensure China finally undertakes serious reforms to its monetary and financial system.”
Sen. Britt said:
“Time and time again, the Chinese Communist Party has shown that they’re not willing to play by the rules that govern international commerce. Given the CCP’s continued malfeasance on the world stage, the Treasury Department should not allow the IMF to further legitimize and strengthen Chinese currency in international financial markets. That’s why we’re introducing this critical legislation to protect American economic and national security.”
Sen. Braun:
“The Chinese Communist Party has manipulated their currency, broken trade laws, and engaged in shady monetary practices. They should certainly not have more influence that comes with a larger share of the IMF’s SDR.”
Sen. Ernst said:
“Make no mistake – the Chinese Communist Party is intent on surpassing the United States economically and militarily, using any tactics necessary. Given China’s unwillingness to play by the rules, we must act now to oppose the continued elevation of their currency. I won’t sit idly by as China increases its financial muscle at the cost of Iowans.”
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