Geithner and the Renminbi: Numbers Please

So Treasury Secretary Geithner testified to Congress on Wednesday. Once again, he said that he did not consider China to be a currency manipulator. In fact, his whole approach to the problem makes it clear that the issue is going firmly on the backburner for the Obama administration, which is a big step. Whether that accommodating stance has anything to do with the fact that China is still by far the biggest buyer of U.S. debt at a time when the country is ramping up its borrowing massively I’ll leave to your judgement. However, one thing was clear: it’s an issue that Congress (which has led the charge on this issue in the past) won’t let go. It was also a puzzling performance by Geithner, who started out studying Chinese and presumably is particularly well briefed on China-related issues. He simply didn’t seem on top of his brief. Unless I missed it (always possible and happy to be corrected here), despite repeated opportunities, he would only describe the appreciation of the RMB against the dollar as “substantial.” In fact, as I am painfully aware, being paid in dollars, it has risen some 20 per cent since 2005. But Geithner clearly didn’t have that number anywhere in his head and was obviously fumbling around trying to avoid the issue as one of the Senators repeatedly asked him to define substantial. If he was going to memorize one statistic, you’d think that would be it.