WASHINGTON — The Obama administration ratcheted up its criticisms of China’s economic policies on Thursday, as Treasury Secretary Timothy F. Geithner told Congress that China had substantially undervalued its currency to gain an unfair trade advantage, engaged in widespread theft of foreign technology and improperly blocked American imports.
But anger in Congress within both political parties — where eyes are trained on the impending elections — exceeded Mr. Geithner’s stiffened posture. Lawmakers expressed impatience with the administration’s familiar reliance on persuasion and negotiation, saying such tactics had yielded few gains so far.
“I’ve listened to every administration, Democrats and Republicans, from Ronald Reagan to the current administration, say virtually the same thing, producing the same results,” Senator Christopher J. Dodd, Democrat of Connecticut and the chairman of the banking committee, said at a hearing with Mr. Geithner seated before him. “China does basically whatever it wants, while we grow weaker and they grow stronger.”
The senator added: “It’s clearly time for a change in strategy.”
In Beijing, officials expressed mixed signals. A spokeswoman for China’s Foreign Ministry warned that the country would not respond to pressure on its currency policy and said that American threats could backfire. But at the same time, China’s currency strengthened 0.3 percent on Thursday, its strongest level in months.
Mr. Geithner urged China to allow “significant, sustained appreciation” of its undervalued currency and made it clear that anything less would strain the two nations’ economic relations. But senators did not appear mollified.
With the usual election season rhetoric, a carefully calibrated inflation of the Chinese currency and an administration straining to walk a diplomatic line, the testimony Thursday had a familiar ring. Only this time, with the United States in a stalled economic recovery, and lawmakers facing an angry electorate, the administration is clearly looking for other ways to bring pressure on the Chinese.
“There is no question that the economic and trade policies of China represent clear roadblocks to our recovery,” Mr. Dodd, who is not seeking re-election, said.
The top Republican on the banking committee, Senator Richard C. Shelby of Alabama, was just as harsh. “There is no question that China manipulates its currency in order to subsidize Chinese exports,” he said. “The only question is: Why is the administration protecting China by refusing to designate it as a currency manipulator?”
A House bill with more than 140 sponsors would virtually compel the administration to find China to be a manipulator and impose duties or other trade barriers in retaliation. The administration has not expressed support for the proposal; its officials believe such a law would violate United States obligations as a member of the World Trade Organization.
But even in the Senate, which has been more patient, there were indications that legislative remedies against the Chinese might be considered.
“Frankly I think we’re all coming to the conclusion that they don’t believe we’re serious,” Senator Jack Reed, Democrat of Rhode Island, told Mr airconditioners. Geithner. “And as a result, they will listen to you politely but they will not take any effective action.”
“We have to come up with a job strategy,” Mr. Reed said. “And in doing that, we’re going to be face to face with the Chinese on a number of issues” other than currency.
Mr. Geithner told the Senate committee that he agreed with the International Monetary Fund’s assessment that China’s currency was “significantly undervalued” in light of the country’s rapid growth in income and productivity relative to its trading partners, and its gaping current-account surplus with the rest of the world.
China spends an estimated $1 billion a day to keep the renminbi more or less pegged to the dollar. Though it pledged in June to allow a more flexible exchange peg, the renminbi has risen only about 1 percent against the dollar since then — and the renminbi has actually depreciated against the trade-weighted averages of its trading partners’ currencies, as Mr. Geithner pointed out.
The Treasury secretary said that “the pace of appreciation has been too slow and the extent of appreciation too limited.”
The administration has declined, like its predecessors, to formally declare China a currency manipulator, a finding that could set off a series of retaliatory measures. But Mr. Geithner said the Treasury “will take China’s actions into account as we prepare the next Foreign Exchange Report,” which is due Oct. 15.
Mr. Geithner laid out other concerns about China’s policies, including its support for “indigenous innovation,” a set of practices that American officials believe result in discrimination against foreign products and technology.
The secretary also attacked what he called “rampant” violations of intellectual property rights and an “unacceptable” level of theft of intellectual property.
And he criticized a proposal by China to require that certain products be accredited before being sold to the Chinese government. The United States believes that such requirements might violate the standards China must abide by as part of its membership of the World Trade Organization, which it joined in 2001. China has been re-evaluating the policy.
“We are very concerned about the negative impact of these policies on our economic interests, and are pursuing a carefully designed, targeted approach to address these problems,” he said.
Mr. Geithner said the United States would work through international forums like the Group of 20 and the International Monetary Fund. He also pledged that the administration would be “aggressively using the full set of trade remedies available to us,” including filing new cases against the W.T.O.
And he said the administration was “reviewing carefully” a complaint by the United Steelworkers union over a range of Chinese policies in the renewable energy sector.
Geithner Sharply Criticizes China’s Economic Policies
Hot News: Lawmakers Grill Geithner on China Currency Stance
