EU trade envoy tells China to let yuan rise
Wednesday, 28 April 2010
BEIJING, April 27 (AFP): The European Union's top trade envoy stepped up pressure on China for a stronger currency today, saying it was in the interests of both sides for the yuan to appreciate.
EU Trade Commissioner Karel De Gucht made the remarks during a meeting with Chinese Commerce Minister Chen Deming amid growing calls for Beijing to loosen its grip on the yuan, effectively pegged to the dollar since mid-2008.
"I think whatever methodology you were using, you would come to the conclusion that there is an undervaluation," De Gucht told reporters after his two-hour meeting with Chen.
"I said that I was of the opinion that it was to our mutual benefit that this (revaluation) happen."
During the meeting, De Gucht said Chen denied the currency was undervalued and told him that China would only alter the exchange rate policy when it was "beneficial for their own economy".
Critics say the policy has given Chinese manufacturers an unfair advantage by making their exports cheaper. US lawmakers have been pushing for China to be labelled a "currency manipulator"-opening the door to possible sanctions.
De Gucht was in Beijing ahead of a visit to China beginning Thursday by a high-level EU delegation led by European Commission president Jose Manuel Barroso.
The EU trade envoy said he also asked Chen to delay rules that would force foreign manufacturers of information security products such as smartcards to disclose their source code in order to sell their products in China.
Companies say such a move would violate their intellectual property rights.
"They are claiming that it has to do with security but a lot of the provisions in that regulation, I can't see what they have to do with security," De Gucht said.
"So we are disputing this and have asked for a further delay to leave room for consultation."
The rules are due to be released Saturday. It was not immediately clear when they would come into effect.
EU Trade Commissioner Karel De Gucht made the remarks during a meeting with Chinese Commerce Minister Chen Deming amid growing calls for Beijing to loosen its grip on the yuan, effectively pegged to the dollar since mid-2008.
"I think whatever methodology you were using, you would come to the conclusion that there is an undervaluation," De Gucht told reporters after his two-hour meeting with Chen.
"I said that I was of the opinion that it was to our mutual benefit that this (revaluation) happen."
During the meeting, De Gucht said Chen denied the currency was undervalued and told him that China would only alter the exchange rate policy when it was "beneficial for their own economy".
Critics say the policy has given Chinese manufacturers an unfair advantage by making their exports cheaper. US lawmakers have been pushing for China to be labelled a "currency manipulator"-opening the door to possible sanctions.
De Gucht was in Beijing ahead of a visit to China beginning Thursday by a high-level EU delegation led by European Commission president Jose Manuel Barroso.
The EU trade envoy said he also asked Chen to delay rules that would force foreign manufacturers of information security products such as smartcards to disclose their source code in order to sell their products in China.
Companies say such a move would violate their intellectual property rights.
"They are claiming that it has to do with security but a lot of the provisions in that regulation, I can't see what they have to do with security," De Gucht said.
"So we are disputing this and have asked for a further delay to leave room for consultation."
The rules are due to be released Saturday. It was not immediately clear when they would come into effect.