Chinese Premier Wen Jiabao has told the European Union that the bloc should stop pressing China to revalue the yuan as the currency’s value will increase gradually, in line with China’s policy to guard currency stability.
This came as both sides at the EU-China one-day summit in Brussels attempted to bridge differences.
The Trade Commissioner of the 27-member bloc, Karel de Gucht, had said China must address European grievances if it wants EU “market economy” trade status. He had called for clear commitments on access to the Chinese market, intellectual property protection and the exchange rate.
Analyst André Sapir with the Bruegel Institute said: “It’s politically very hard to point the finger at China as the country that has to act alone.”
French President Nicolas Sarkozy is gambling on drawing China into a multilateral dialogue on currency stability as the centrepiece of his presidency (starting this November) of the G20 economic leadership forum.
Sapir said: “The G20 has a framework in place for balanced growth at a global level, in which each of the three main players, the US, Europe and China, must act. I believe that is the solution, but China has its work cut out for it.”
Greece is not complaining. It rolled out the red carpet for Wen on Saturday. With massive investment in Greece, including pledges to buy government bonds, China is embracing a robust opportunity to gain a foothold in the European Union market.
EU-China summit strained over yuan