Cameron urges China exchange rate move

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Cameron urges China exchange rate move

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British Prime Minister David Cameron has urged China to move towards greater exchange rate flexibility – that is letting its currency, the yuan or renminbi, rise against the pound, the euro and the dollar.

The US and others accuse China of keeping it undervalued to gain a trade advantage.

Cameron also called on the Chinese government to safeguard the global recovery by rejecting protectionism.

Cameron told students at the elite Peking University: “China is already talking about moving towards increased domestic consumption, better healthcare and welfare, more consumer goods as its middle class grows, and in time introducing greater market flexibility into its exchange rate.”

“This cannot be completed overnight, but it must happen,” Cameron added.

The currency issue is likely to cause tensions at the G20 summit this week in South Korea.

In an earlier meeting with China’s President Hu Jintao in the Great Hall of the People, the two leaders discussed the issue of global economic imbalances.

Cameron, leading Britain’s biggest trade delegation to China, urged the Chinese authorities to help ward off a retreat into protectionism.

“Britain will go on arguing that in Europe we should be open to trade from China and not putting up trade walls, and we need you to help us to make that argument about why protectionism is wrong,” Cameron told a meeting of business delegates