China’s Vice Commerce Minister Zhong Shan told business leaders in Washington on Wednesday that China would reform its currency policy gradually and keep the exchange rate stable.

But a growing number of U.S. economists estimate China's currency is undervalued by up to 40 percent.

They say that gives China an unfair price advantage in international trade, takes jobs away from other countries and adds to global financial distortions.

U.S. lawmakers are crafting legislation that would slap import duties on Chinese goods.

This would help offset the price advantage China enjoys from suppressing the value of its currency.

Sponsors of a bipartisan bill want U.S. President Barack Obama's administration to formally label China a currency manipulator in a semi-annual Treasury Department report due on April 15th.

[Fred Bergsten, President, Peterson Institute of International Economics]:
"I actually think there is a reasonable chance this time that the Treasury will designate China as a manipulator."

Bergsten says he thinks people understand and actually expect the United States to pursue this type of an initiative.

Wary of straining U.S.-China relations, Obama twice rejected that route in 2009.

He has instead pressed Beijing to move to a "more market-oriented exchange rate."

Niall Ferguson is a history and business professor at Harvard University.

He cautions U.S. lawmakers against unilateral U.S. actions like imposing an across-the-board tariff on Chinese exports or countervailing duties on selected goods, saying that a multilateral pressured approach was more likely to yield productive results.

[Fred Bergsten, President, Peterson Institute of International Economics]:
"It should be the world against China. We should be able to mobilize a coalition of not just the willing but almost everybody to join in the IMF and in the WTO to bring multilateral pressure to bear.”

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