Congress Challenges China on Falun Gong & Yuan

Here’s a strange match: Ron Paul, the Texas Congressman, GOP presidential candidate, libertarian hero and scourge of the Federal Reserve, might now be China’s favorite lawmaker in Washington. Paul was the only member of the House yesterday to vote no on a proposal likely to inflame already strained U.S.-China relations by poking Beijing on one of the most sensitive issues of all, the Falun Gong.

For years, the Chinese government has been suppressing the spiritual movement, which got its start in the early 1990s, as an evil cult. Falun Gong leaders outside the country have responded by calling on countries to denounce the Chinese government. On March 16, the House of Representatives voted 412-1 in favor of House Resolution 605, “recognizing the continued persecution of Falun Gong practitioners in China on the 10th anniversary of the Chinese Communist Party campaign to suppress the Falun Gong spiritual movement and calling for an immediate end to the campaign to persecute, intimidate, imprison, and torture Falun Gong practitioners.” Paul provided the sole dissenting vote. As AFP explains, Paul “routinely opposes measures he considers interference in another nation’s internal affairs.” There’s no comment regarding the vote on Paul’s Web site.)

The House vote hits the rawest nerve for China’s leadership, but action yesterday on the other side of Capitol Hill could create more lasting tension between Washington and Beijing. A bipartisan group of five senators, including Chuck Schumer of New York and Lindsey Graham of South Carolina, introduced a bill designed to make it easier for the U.S. to declare China is manipulating its currency, the yuan. Like the House vote, the Senate proposal is a message to Beijing that patience in Washington is wearing thin. “There is growing exasperation with China,” C. Fred Bergsten, director of the Peterson Institute for International Economics in Washington, tells my Bloomberg colleague Mark Drajem.

The Chinese are showing no signs of budging. Certainly they’re not going to move on the Falun Gong, which the regime considers to be an existential threat to Communist Party rule. Movement on the currency is possible: China allowed the yuan to appreciate from 2006 to 2008, in part because of pressure from the U.S. and other countries. For now, Chinese Premier Wen Jiabao is holding fast, denying that the currency is undervalued. With the rhetoric from both sides of the Pacific getting ever-more heated, however, China’s unlikely to make any concessions for a while.

Read the original story at BusinessWeek Eye on Asia Blog