Save this press release for the archives: it may well be the formal counter announcement of a trade war from China, which now realizes it has a batshit schizo trading partner, one who critically needs China to recycle its mercantilist dollars into buying America's one ply toilet Treasurys, yet one which is now blasting China for doing just that...
From the Chinese Ministry of Commerce
On October 11, the U.S. Senate passed the "2011 Oversight Reform Act of currency exchange rate," Shen Danyang, a spokesman for the Ministry of Commerce has issued a statement that the recovery in the global economy facing a severe test of the critical moment, the U.S. Senate to force through legislation to promote trade partner currencies, is tantamount to upgrading the wrong signal on protectionism. This is a serious violation of international rules, and not only threatens the stable development of Sino-US economic and trade relations, but also with other countries to jointly cope with challenges, runs counter to efforts to oppose trade protectionism, China is firmly opposed.
Shen Danyang stressed that China has always maintained need for the two sides to strengthen communication, and to take common positive measures to develop Sino-US economic and trade cooperation. Once the motion is formally made into law, it will inevitably lead to serious damage to China-US economic and trade relations. China hopes that the U.S. after a rational and objective treatment of the exchange rate, makes the right choice.
And now, the PBOC gets involved too:
October 11, the U.S. Senate passed the "2011 Reform Act of currency exchange rate surveillance", which, we firmly oppose.
In recent years, China to accelerate the reform of RMB exchange rate formation mechanism, and has achieved significant results, the RMB exchange rate is becoming more and more reasonable and balanced level, but also for the international economy has made important contributions to financial stability. It won't solve the U.S. economy and employment problems and will only seriously disturb Sino-U.S. economic and trade relations and will also disturb the efforts of the two countries and global community's joint efforts to promote the world economic recovery and growth.