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Wednesday, 02 December 2009 15:48 |
The Wall Street Journal
December 1, 2009
The Wall Street Journal
By JAMES T. AREDDY
December 1, 2009
http://online.wsj.com
Trading partners exchange barbs over yuan, climate change, development and human rights
NANJING, China -- Chinese and European Union leaders appeared to make little headway on currency, climate and market access in a round of high-level talks that ended Monday in this eastern Chinese city.
The two-day China-EU summit was billed as a chance for the two major trading partners to tailor exit policies from a year of global recession, as well as an opportunity to refine positions ahead of the Copenhagen conference on climate change. Instead, the two sides traded barbs over those issues plus others such as development strategies and human rights.
EU officials pressed their argument that Beijing could loosen the yuan's rigid exchange rate against the U.S. dollar to help rebalance the world financial system.
Addressing reporters after their formal meetings Monday, Chinese Premier Wen Jiabao, flanked by his European counterparts, responded to that call with a pointed assertion that the 27-nation bloc maintains trade policies to which China objects. "This is unfair," Mr. Wen said. "Their measures are restricting China's development."
Swedish Prime Minister Fredrik Reinfeldt, who is the current president of the European Council, the assembly of EU leaders, acknowledged Beijing's pledge last week to reduce the growth in its carbon emissions between now and 2020, but said it doesn't do enough to seal a global deal to keep the planet from warming. "We can't solve the climate challenges for mankind without China being part of the solution," he said.
In a speech later to a Sino-European business conference connected to the summit, Mr. Wen highlighted what he called the "great cost to the resources of the whole world" from 200 years of industrialized nations' development. He listed ways China is not only supporting world economic growth during its own "difficult period," but also keeping its eyes on emission output controls. Its investments in hydropower and nuclear power, as well as the closure of dirty coal mines, he said, underscore "China's sense of responsibility to the Chinese nation and the entire human race."
The EU and China are among each other's largest trading partners. Each also endorses a multipolar world, preferring to address challenges in larger groups such as the Group of 20 nations.
Still, concrete action in Nanjing was limited to technical agreements covering areas such as construction codes and clean-energy research. A joint communiqué from the closed-door summit was light on specifics and signaled little sign of fresh momentum in the relationship.
The yuan's de facto peg to the dollar means it has depreciated significantly against the euro in recent months, even though many economists say there should be upward pressure on the yuan. The euro's strength against the yuan has remained vexing to European politicians, who worry the exchange rate limits buying power of the fast-growing Chinese economy at a time unemployment in EU markets is high. The yuan gained more than 20% against the dollar in the three years after China formally depegged the two currencies in mid-2005, but that did little to address exchange-rate issues with the euro, and the yuan's dollar peg was effectively re-established in mid-2008.
Mr. Wen reiterated that China "doesn't seek a trade surplus that is beyond a reasonable level." Instead, he highlighted Europe's barriers, like export limits on Europe's highest technology, and called for his counterparts to "fully unleash the industrial advantage of the EU."
The postsummit declaration didn't specifically mention currency dynamics. Instead, it said that to "effectively address the current economic and financial crisis, the two sides agreed to step up efforts to promote trade and investment and increase effective market access."
Write to James T. Areddy at james.areddy@wsj.com
http://online.wsj.com/article_email/SB125957944561669451-lMyQjAxMDI5NTA5MTUwNzE5Wj.html
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