China-EU summit: no agreement on yuan
Mr Wen rejected European pressures for the revaluation of the Chinese currency, claiming that the demand is not correct. “Now some countries, on the one hand, want the renminbi to appreciate but, on the other hand, engage in brazen trade protectionism against China,” Wen said.
The United States in particular has taken a number of steps recently to slow a surge in competitively priced imports from China in sectors including steel, tyres and paper.
“Faced with the present complex economic conditions, we must appropriately handle trade friction and not engage in trade protectionism. I hope the EU will relax its controls on high-tech exports to China,” Wen added. However, his words satisfied very few Europeans.
The renmimbi is currently pegged at 6.83 against the US dollar and 10 against the euro. For the EU, which is China’s main export market with 20 per cent of total exports, the effect is a huge trade deficit with China.
Jean-Claude Juncker, president of the Euro Group of finance officials, said a policy shift by Beijing would show that the mainland economy was "robust" and signal confidence in the recovery.
“We are not advocating there is any need for short-term dramatic change in China's economic policy, but expect a gradual and orderly appreciation of the renminbi,” he said.
The European delegation also included Jean-Claude Trichet, head of the European Central Bank, and Joaquin Almunia, European Union economic and monetary affairs minister.
“The Chinese economy has been a remarkable success for several years and has proved in the recent period a capacity to surmount difficulties, which is also certainly remarkable," Trichet said. He added though that the time had come for a shift in currency policy.
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