Speaking to reporters after summit talks with the European Union, Wen said the demands being made of Beijing to push up the yuan’s exchange rate were not fair. He reaffirmed China’s determination to take its own, gradual steps on the currency front but said that for now the yuan, also known as the renminbi, was being kept broadly steady.
“In this international financial crisis of a kind rarely seen in history, maintaining the basic stability of the renminbi exchange rate has benefited China’s economic development and benefited world economic recovery,” Wen said. “Now some countries, on the one hand, want the renminbi to appreciate but, on the other hand, engage in brazen trade protectionism against China. This is unfair. In fact, it amounts to restricting China’s development,” he said.
The EU had promoted the summit as an affirmation of its global status. But Wen swatted away the bloc’s complaints about his government’s policy on the yuan. His blunt words stiffened Beijing’s defense of its exchange rate stance. He not only defended that policy, but attacked critics as promoters of dangerous protectionism who were threatening global economic recovery.
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,” Wen said.
The contentious question of the yuan’s exchange rate has dominated two days of talks with an array of high-ranking EU policymakers in this eastern Chinese city. The EU is China’s biggest market, taking 20 percent of its exports, and runs a big bilateral trade deficit with China.
The three top economic officials representing the 16 EU members that use the euro pleaded on Sunday for a renewed gradual rise in the yuan, which China has virtually pegged to around 6.83 per dollar since July 2008 to help its exporters weather the global credit crunch. European Commission President Jose Manuel Barroso also pressed those demands on Sunday, telling Wen that the low value of the yuan was hurting parts of the EU economy. But in his remarks to reporters on Monday, Barroso did not mention the yuan, and he abruptly cancelled another news conference about the EU-China summit.
