How much will taxpayers shoulder?

[Jester]

I have trouble finding negative remarks on Chinese trade policy in there. What exactly are you referring to?

I am referring to the section I stated above, pages 30 to 33 of the section "Economic Environment". It is entitled "Monetary Policy".

For instance:

According to the IMF, the observed path of the exchange rate and reserve build up, coupled with information regarding intervention, suggest that the exchange rate was mainly determined by official action, prompting this [crawling peg] classification.

While China has relaxed some capital market controls (see below), by and large, the RMB is not traded freely internationally.

From the footnotes, pointing out the concerns of the US and others:

While any assessment of whether a currency is undervalued (and the extent of such undervaluation) is fraught with analytical difficulties, the lack of flexibility of the exchange rate and its alleged undervaluation is seen by some as providing an advantage to China's exports.

And at the end on page 48:

Nonetheless, there remains the immediate issue concerning the ability of monetary policy to combat rising inflation. In this regard, a more flexible exchange rate regime could enable China to operate a more independent monetary policy, which would be better suited to ensuring a low and stable rate of inflation, and therefore contribute to a macroeconomic environment more conducive to sustained strong economic growth. A more flexible exchange rate and thus more independent monetary policy would complement structural reforms, especially those concerning the capital market, and obviate the need for price controls and other non-market measures to contain inflation. There are signs that China's exchange rate regime has become more flexible recently; in January 2008, the renminbi appreciated nearly 1.6% in relation to the U.S. dollar, the largest monthly increase since the July 2005 reform of the foreign exchange regime.

Now, read this as you will. But I think I can read the bureaucratese well enough to figure out what it's saying: The Chinese government is holding their currency down, and it's helping their exports. They agreed to float their currency in 2005, largely to get the currency reform monkey off their backs, but then kept enough official control in place that it wasn't really floating at all, but actually pegged through indirect means. Now, they compliment China on having improved things recently, but note the backhand: that their exchange rate has improved recently means that it was in a position in need of reform beforehand.

You have the right on your own opinion regarding fairness, ofcourse, but the WTO and US Treasury Department seem to disagree. I suppose they also misunderstood everything? :glare:

You have not pointed out where the US Treasury Department have said this, at the very least, and I think your read of the WTO document is wrong, although in fairness it appears you did not find the section I was referring to. You quoted the Treasury Department above, and as I pointed out then, your reading of it was at best selective, at worst completely backwards.

... and if you think, for one split second, that I believe the standards of fairness in the world are to be determined somehow relative to the baseline of the United States' actions, then I'm afraid you really need to go back to what I've written about the Iraq war and other such topics.

-Jester