The Metalworking Manufacturing Coalition (MMC) expressed cautious optimism following the announcement by China that it will revalue its currency for the first time in a decade, but urged the U.S. government to maintain pressure on the Chinese to work towards an even more flexible market-based currency system.

China allowed a 2.1% appreciation of the yuan (renminbi), ending the fixed peg to the US dollar that has caused damage to many U.S. manufacturers, including lost jobs and lost business.

"Obviously, China's move to revalue its yuan by 2.1% is a great first step in allowing U.S. manufacturers to compete fairly after ten years of currency manipulation," said William E. Gaskin, President of the Precision Metalforming Association, a member of MMC. "We hope this is a start of a gradual appreciation process by the Chinese. Small and medium-sized manufacturers have been especially impacted over the last several years and have watched their business and jobs move to China where the undervalued currency handed Chinese exporters an unfair advantage."

The People's Bank China, the country's central bank, said it would immediately allow the yuan to rise from its current 8.28 to the dollar to 8.11 — an increase of about 2.1%. With the former fixed peg, Chinese manufacturers were able to produce relatively inexpensive products in comparison to U.S. exports. The undervaluation has been partly responsible for the loss of approximately 1.5 million jobs to China last year. Economists estimate that China's currency manipulation has resulted in substantial undervaluation of the yuan, perhaps by 40% or more. According to China, there will be a move towards a managed floating exchange rate regime based on a basket of currencies.

"We are grateful to those U.S. lawmakers who are taking a stand against Chinese currency manipulation, considering the needs of U.S. manufacturers and looking for real solutions to apply pressure on the Chinese to make changes," said Gaskin. "Rep. Tim Ryan (D-OH) and Rep. Duncan Hunter (R-CA) played a large leadership role with the Chinese Currency Act of 2005 and we are thankful to the more than 100 Democrats and Republicans who signed on to the bill, demonstrating how serious Congress has been about fixing the China problem. The pressure on China by our senior government officials is working."

The Chinese Currency Act of 2005, H.R. 1498, was introduced by Reps. Ryan and Hunter in April 2005. It was introduced to allow U.S. industries harmed by currency manipulation to seek relief under existing U.S. trade statutes. Additionally, it holds China and other countries accountable for currency manipulation, defines currency manipulation as a prohibited export subsidy, and includes a national security component that can restrict certain Chinese products.

The Metalworking Manufacturing Coalition (MMC) is a coalition of 11 manufacturing trade associations, and represents more than 10,000 individual manufacturing companies with more than 500,000 employees. Members include the American Foundry Society, Forging Industry Association, Industrial Fasteners Institute, Metals Service Center Institute, National Tooling & Machine Assoc., Non-Ferrous Founders' Society, Precision Machine Products Association, Precision Metalforming Association, Spring Manufacturers Institute, Steel Founders' Society of America, and Tooling & Manufacturing Association.