Chinese Premier Wen Jiabao called for “relatively stable” exchange rates, rebuffing American pleas for a sudden appreciation of the yuan to trim China’s trade surpluses with the U.S.
Wen opened three days of meetings with European officials in Brussels today by highlighting the “many uncertainties” clouding the world economic recovery, including the threat of a renewed sovereign debt crisis in Europe.
“We should intensify macroeconomic policy coordination, manage with caution the timing and pace of an exit strategy from economic stimulus and keep the exchange rates of major reserve currencies relatively stable,” Wen said at the start of a 48- nation Asia-European summit.
U.S. pressure on China mounted on Sept. 29 when the House of Representatives passed a measure that would let American companies seek import duties to prevent Chinese manufacturers from using an artificially weak yuan as a competitive tool. The measure won’t go to the Senate until after U.S. congressional elections in November.
While European Union officials were silent about currencies in the public summit session, they will play up the issue of the “heavily undervalued” yuan in separate meetings with China’s economic leadership tonight and tomorrow, said Guy Schuller, a spokesman for Luxembourg Prime Minister Jean-Claude Juncker.
Amid criticism from the U.S. and Europe, China has capped the yuan’s gains at about 2 percent against the dollar since the People’s Bank of China eased it off a two-year peg of 6.83 per dollar in June.
The outcry from the industrial world is unlikely to force China to push the currency up faster, EU Trade Commissioner Karel De Gucht said.
“There is a real problem with the value of the Chinese currency,” De Gucht said in a Bloomberg Television interview in Brussels. “I have my doubts whether you can influence that by international pressure.”
Wen will hold a separate meeting with EU leaders on Oct. 6, after the two-day EU-Asia summit.
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