EU leaders have been putting pressure on China to lower the value of the yuan at a summit meeting in Nanjing.
EC President Manuel Barroso headed the European delegation that met with a Chinese team headed by Prime minister Wen Jiabao. Despite China’s economic growth the yuan has depreciated against the Euro over the last 12 months, a state of affairs which is unacceptable to the head of the eurogroup of eurozone finance ministers. “It’s difficult to communicate to our general public that the fastest growing economy in the world that’s the Chinese one, producing huge surplusses, is depreciating against the currencies of the major powerhouses,” said Jean-Claude Juncker. The other bone of contention is the huge trade gap between Europe and China. The EU exports some 98 billion euros in goods and services to China, whereas China exports 262 billion euros in return. The European delegation argues that it is in China’s interests to maintain the economic health of target markets by establishing a monetary policy that enables balanced two way trade. The yuan has has been depreciating since its value has been linked to the American dollar.