WASHINGTON, DC - At a Senate Banking Committee hearing today examining the enormous impact China's economic and trade policies have on American companies and consumers, U.S. Senator Jack Reed (D-RI) urged the Obama Administration to target unfair Chinese currency practices.

Despite China's rapid growth in income and productivity relative to its trading partners, experts have testified that that Chinese government maintains the yuan at an artificially low value to keep China's exports cheap and make imports to China more expensive.

"Chinese protectionism is putting U.S. economic recovery at risk. China's manipulation of its currency has the effect of a significant subsidization of China's and other Asian countries' exports and is a virtual tariff on U.S. imports," said Reed. "We must not allow currency manipulation by foreign nations like China to be used to negotiate around existing trade rules and create an uneven playing field that disadvantages American workers and businesses."

Testifying before the committee, U.S. Treasury Secretary Timothy Geithner stated: "China needs to allow significant, sustained appreciation over time to correct this undervaluation and allow the exchange rate to fully reflect market forces."

Geithner assured the committee that the Obama Administration would be "aggressively using the full set of trade remedies available to us," and that yesterday the U.S. filed a pair of new complaints against China with the World Trade Organization.

"I agree with Secretary Geithner that the yuan needs to fully reflect market forces. But we can't afford to sit back and allow China's currency manipulation to continue distorting global markets and putting American workers and companies at a competitive disadvantage," stated Reed. "We need to enforce the trade laws we have and pass additional tough new trade laws that will hold China should accountable and put an end to its currency and market manipulation."

Senator Reed is an original cosponsor S. 3134, the Currency Exchange Rate Oversight Reform Act. This legislation would improve the process for citing countries for currency manipulation and impose significant new penalties on designated countries, including tariffs on exports and a ban on providing U.S. government contracts to companies from those countries.