(1)   Has he read the report The China Balance Sheet in 2007 and Beyond by the Peterson Institute for International Economics.

(2)   Is he aware that the report referred to in Part (1) quotes Mr Fred Bergsten, director of the Peterson Institute for International Economics, as saying that “China is overtly exporting unemployment to other countries and apparently sees its currency undervaluation as an off-budget export and job subsidy that has avoided effective international sanction”; if so, can he confirm the accuracy of this statement.

(3)   Can he confirm that China’s current account surplus was approximately $US 250 billion in 2006, or some nine per cent of its GDP, and that its foreign exchange reserves stand at more than $US 1 trillion.

(4)   Has the Treasury examined the Peterson Institute’s estimate that China’s currency would need to rise by some 35 per cent against the US dollar in order to have any significant impact on the US trade balance; if so, what are the details.

(5)   Has the Treasury examined the effect of the undervaluation of the Chinese currency on (a) the balance of trade, (b) imports and/or (c) exports; if so, what are the details.

(6)   What would be the effect be of (a) a slight revaluation of the Chinese Yuan and (b) a 35 per cent revaluation of the Chinese currency on (a) the balance of trade, (b) imports and/or (c) exports.

According to the World Bank’s China Quarterly Update of May 2007, China’s current account surplus was US$250 billion in 2006 (or 9.5 per cent of its GDP), and its foreign exchange reserves stood at US$1066 billion at the end of 2006. The report can be found at:

http://siteresources.worldbank.org/CHINAEXTN/Resources/318949-1121421890573/china_05_07.pdf.

Treasury has examined the issues relating to the Chinese currency. Please refer to: ‘The Chinese currency: how undervalued and how much does it matter?’, Economic Roundup Spring 2005, which can be found at:

http://www.treasury.gov.au/documents/1042/HTML/docshell.asp?URL=08_RMBundervaluation.asp.