U.S. Senator Warns Beijing

Tuesday, August 7th 2007, 8:40 am

By: News On 6

BEIJING (AP) _ Sen. Joe Lieberman told Chinese lawmakers Tuesday a Senate panel measure that could lead to possible sanctions against Beijing should be taken as a warning of America's frustration over the nation's currency valuation.

``I think it should be taken very seriously here in Beijing,'' said Lieberman, of Connecticut, after meeting with leaders of China's legislature, the National People's Congress.

Last week, the Senate Finance Committee approved, by a lopsided 20-1 vote, a bill that would require the administration to pursue currency manipulation cases before the International Monetary Fund.

Critics contend Beijing keeps its currency, the yuan, undervalued by up to 40 percent, giving its exporters an unfair price advantage and adding to its multibillion-dollar trade surplus.

U.S. Treasury Secretary Henry Paulson and other officials are trying to forestall drastic action by Congress. Paulson is leading a ``strategic economic dialogue'' with Beijing over currency and other disputes, and says it is producing results.

Meeting with Chinese legislators, ``I said I thought the vote on the currency legislation should be taken as a warning, and to the extent that it is possible to accelerate the appreciation of the currency here, it would be a step in the right direction,'' Lieberman said.

The communist Beijing government has eased controls on the yuan and says it is pursuing other reforms sought by Washington. But it says moving too abruptly will cause financial turmoil.

Lieberman, an independent who is chairman of the Senate Homeland Security and Governmental Affairs Committee, was due to meet later with Chinese Foreign Ministry officials. He was not scheduled to meet with Chinese leaders or senior trade officials.