New treasury secretary claims Chinese currency manipulation

New Treasury Secretary Timothy Geithner potentially stirred up a hornet’s nest in his reply to a question posed by Sen. Charles E. Schumer (D-N.Y.) of the Senate Finance Committee on Jan. 21. When asked about the new administration’s stance on China’s monetary policy, Geithner replied, “President Obama — backed by the conclusions of a broad range of economists — believes that

China is manipulating its currency.” While China’s active management of its currency, the yuan (or renminbi), is a widely known reality, to label it as “manipulation” — a term with a distinct connotation of, as Geithner puts it, “undermining fair-trade principles” — goes slightly beyond the language the previous U.S. administration had used.