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Europe demands China budge on currency

Posted by arnon_k On October - 7 - 2010 ADD COMMENTS

European Union leaders said Wednesday that they had urged Chinese Premier Wen Jiabao to act to raise the value of China’s yuan currency, during a fractious summit in Brussels.

“We stressed that structural reforms in Europe and in China were essential, and highlighted the role of appropriate exchange rates,” EU President Herman Van Rompuy and European Commission chief Jose Manuel Barroso said in joint remarks released at the end of talks that lasted under three hours.

“We underlined the importance of rebalancing global growth and reducing global imbalances,” the pair said, referring to concerns that an undervalued yuan skews trade flows in favour of cheap Chinese exports.

An EU source told AFP that the effort to get China to ease its policy of pegging the yuan to the US dollar, at a time when the euro has hit an eight-month high on currency markets, fell flat.

“We put our cards on the table,” the source said. “We heard each other out and managed to establish a dialogue of sorts in the economic sphere.

“But it was not an easy summit.”

Earlier, Wen had told a Europe-China business forum: “I say to Europe’s leaders — don’t join the chorus pressing (China) to revalue the yuan.”

A sharp yuan appreciation would “cause many Chinese companies to go bankrupt, casting people out of work … and creating social unrest,” Wen said.

The summit, which started an hour late, ended with Wen, due next in Rome for talks with Italian Prime Minister Silvio Berlusconi, left without meeting the Western media.

A planned press conference was cancelled when it became clear that time constraints and sharply diverging views on currency, trade, representation for emerging nations in global institutions, and human rights issues, dear to the EU’s heart, would not be bridged, the EU source added.

Van Rompuy and Barroso said that the EU also told Wen of “the need for a level playing field in China for our businesses,” including the “opening up of public procurement” — government contracts.

Europe has threatened to make it tougher for Chinese companies to win major contracts if it does not ease barriers.

Rompuy and Barroso also noted that on the issue of greater representation for emerging economies on global bodies such as the International Monetary Fund — something Beijing wants to see — more say came with added responsibilities.

“We underlined that enhanced representation should go hand in hand with enhanced responsibilities in global governance,” the two said.

Changes to board representation are likely to figure at the upcoming IMF annual meeting in Washington. The EU has offered reforms, including changes to its own seats, but attached a host of conditions in return.

China’s Wen threatens new action in Japan boat row

Posted by arnon_k On September - 22 - 2010 ADD COMMENTS

China’s premier threatened “further actions” if Japan fails immediately to release a trawler captain, as Beijing staged its highest-level intervention yet in a bitter row between Asia’s biggest powers.

Japan in turn called for talks to resolve the feud, but rejected China’s territorial claim to disputed islets near where the Chinese skipper was apprehended by Japanese coast guard crews two weeks ago.

“I strongly urge the Japanese side to release the skipper immediately and unconditionally,” Chinese Premier Wen Jiabao said in New York, according to the official Xinhua news agency.

“If Japan clings to its mistake, China will take further actions, and the Japanese side shall bear all the consequences that arise,” he said, urging Tokyo to “correct its mistakes to bring relations back on track”.

The dispute between Asia’s rising giant and its most advanced economy has drawn concern in Washington, and both Wen and Japanese Prime Minister Naoto Kan are due to hold talks at the UN this week with US President Barack Obama.

Japanese Foreign Minister Seiji Maehara, also visiting New York for the UN General Assembly, dismissed China’s longstanding claim over the rocky islets, which lie near possible oil and gas fields in the East China Sea.

“There is no territorial issue,” he said.

However, Japan said Wednesday it was ready for dialogue.

“It would be good to hold high-level talks, including a comprehensive and strategic dialogue, as quickly as possible,” Chief Cabinet Secretary Yoshito Sengoku told a news conference in Tokyo.

Asked if Kan should try to hold direct talks with Wen on the UN sidelines, Sengoku said: “That would be one option. We should also check if there are other ways, as soon as possible.”

China had on Tuesday dashed any hope of fence-mending talks between Wen and Kan, with a foreign ministry spokeswoman saying the atmosphere was “not suitable for such a meeting”.

“The issue has severely hurt bilateral relations,” she told reporters.

China has repeatedly demanded that detained skipper Zhan Qixiong be released, summoning Japan’s ambassador six times, calling off several official visits and planned negotiations, and cancelling cultural events.

It further announced on Sunday that it had suspended high-level exchanges after Japan decided to extend Zhan’s detention until September 29, when he must be either indicted or released.

The dispute has caused anger among the Chinese public, which is still ambivalent towards Japan after its forces occupied swathes of northern China before and during World War II.

Sengoku, the Japanese government’s top spokesman, on Tuesday emphasised the importance of keeping “narrow-minded, extreme nationalism” at bay.

At the weekend, small groups of anti-Japan demonstrators rallied in three Chinese cities over the captain’s arrest near the islands, known as Senkaku in Japan and Diaoyu in China, but the protests were brief and peaceful.

On Wednesday a group of Hong Kong nationalist activists set sail for the disputed chain aboard a 150-foot (45 metre) vessel, trailed by two Hong Kong marine police boats.

US Deputy Secretary of State James Steinberg has said the flare-up is “unfortunate” in light of efforts by China and Japan to repair relations in recent years.

“Good relations between China and Japan are in our interest. It’s in the interest of everybody else in the region,” he said, before China warned the United States Tuesday to stay out of its territorial disputes elsewhere.

Sino-Japanese ties hit rock-bottom during the 2001-2006 premiership of conservative Junichiro Koizumi due to his annual visits to the Yasukuni shrine in Tokyo, which honours 2.5 million Japanese war dead, including war criminals.

Relations have gradually warmed in recent years as Koizumi’s successors have refrained from visiting the shrine, seen by Japan’s East Asian neighbours as a symbol of Tokyo’s past imperialism.

Wen broke the ice when he made a visit to Japan in 2007, the first visit by a Chinese leader to Tokyo since 2000.