Bernanke says China can't take all the blame for the growing trade deficit

0 Comments | USA TODAY, July, 2007 | by Barbara Hagenbaugh

WASHINGTON -- Federal Reserve Chairman Ben Bernanke said Thursday that he was frustrated with the slow pace of China's currency revaluation. But he cautioned a faster appreciation in the yuan was not a panacea to the broadening U.S.-Chinese trade deficit or other ills, such as losses in manufacturing jobs, for which lawmakers place blame on China.

Bernanke argued a faster appreciation in the yuan would give the Chinese greater flexibility to conduct interest rate policy and foster a balanced economy.

"The currency, while an important issue, is probably in itself not going to solve the trade imbalance problem," Bernanke told members of the Senate Banking Committee on the second day of his semiannual testimony on the economy before Congress.

Two years...