Federal Reserve Chairman Alan Greenspan has said that a rise in the value of China's currency against the dollar would have little impact on America's growing trade deficit and the loss of U.S. manufacturing jobs. The Administration has asked China to stop its practice of linking the value of Chinese currency to the dollar at a fixed rate. Greenspan said the plan oversimplifies the problem, noting that if the value of China's currency rose making their goods more expensive, it would probably not increase manufacturing in the U.S. but shift imports to other low-wage countries in Asia. A spokesman for the National Association of Manufacturers disagreed with Mr. Greenspan, arguing that the change would decrease the trade deficit and save U.S. manufacturing jobs.
See "Greenspan: China isn't costing U.S. jobs", Martin Crutsinger, The Atlanta Journal-Constitution, December 11, 2003