* House to hold hearing on China currency in September
* Lawmakers to vote on three manufacturing bills next week (Adds Hoyer quotes, background)
By Doug Palmera(Reuters) - A coalition of U.S. business groups urged House of Representatives Speaker Nancy Pelosi not to include legislation aimed at forcing China to revalue its currency in a pre-election package of bills intended to help U.S. manufacturers.
"We agree that China needs an exchange rate that better responds to global trade flows ... We strongly disagree that legislation is the best means to achieve that goal," the U.S.-China Business Council and about two dozen other business groups said in a letter released on Friday.
House Democrats, in the run-up to the congressional elections in November, have started touting a "Make it in America" agenda aimed at boosting manufacturing jobs.
Bowing to pressure for action on China's currency, which many lawmakers believe is unfairly undervalued against the dollar by 25 percent to 40 percent, the House Ways and Means Trade Committee will hold a hearing on possible legislative options when lawmakers return the week of Sept. 12 from a six-week recess that begins July 31.
"We're prepared to compete with anybody in the world but, we can't compete when the rules are skewed against us and that is what the hearing will address ... We frankly think there are a number of areas in which China is not playing by the rules," House Majority Leader Steny Hoyer told reporters.
Representative Tim Ryan, an Ohio Democrat, is expected to testify at the September hearing on a bipartisan bill he has crafted with Representative Tim Murphy, a Pennsylvania Republican, which has 130 co-sponsors in the House.
It would require the Commerce Department to apply countervailing or anti-dumping duties against countries that are found by the U.S. government to have a fundamentally undervalued exchange rate against the U.S. dollar.
It is similar to a bipartisan bill backed by Senator Charles Schumer of New York and others in the Senate.
"China is unlikely to proceed more quickly with currency reforms if threatened with this action," the business groups said in their letter to Pelosi and Hoyer.
Rather than accomplish its goal of helping U.S. manufacturers, the Ryan-Murphy bill would "likely result in the loss of jobs and market share in many competitive U.S. agricultural, manufacturing and service industries that either operate in or export to China," the groups said.
However, many U.S. steel, textile and other import-sensitive manufacturers say the legislation would help keep jobs in the United States.
The House will vote on three bills next week as part of its manufacturing agenda.
One would require the White House to develop and update a manufacturing strategy every four years.
A second would bar President Barack Obama from submitting any free trade agreement to Congress until a commission established by the bill makes recommendations for cutting the U.S. trade deficit and Congress has held hearings on the ideas.
The third would create a $15 million fund to support the development of a National Clean Energy Export Strategy and provide export assistance to clean energy companies.