Greenspan against trade sanctions

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Federal Reserve Chairman Alan Greenspan said today in testimony before the finance committee of the US Senate that trade sanctions against China would not hold any advantages for the United States. The hearings grew out of increasing concerns about China on the subjects of that nations exports and its current high interest in investing in US companies. The hearings are especially relevant in light of China state-controlled National Offshore Oil Corporations almost $20 billion bid Wednesday for US oil company Unocal. Mr. Greenspan addressed a couple of issues, including the imposition of proposed tariffs against China and revaluation of Chinas currency. Tariffs would not have any effect in protecting jobs in the US, Mr. Greenspan said, because lower imports from China would only mean that more good would be imported from other low-cost markets in Asia and Latin America. Instead, the tariffs would threaten growth in living standards worldwide, including in the United States. Addressing revaluation of Chinese currency, Mr. Greenspan said that revaluation would be of benefit to China but that it would do nothing to stimulate jobs or manufacturing in the US. The US Treasury secretary, John Snow, also addressed the Senate committee, repeating the administrations insistence that China revalue its currency as soon as possible.