Chinese Premier Snubs Euro Plea
Filed in archive Yuan Renminbi on November 28, 2007
If the euro is worth too much in China or the yuan is worth too little in France and Germany, that's America's fault.
That was the basic message Chinese Premier Wen Jiabao gave to European central bank officials this week after two days of talks on how to make the yuan stronger in Europe, according to CNBC.
While the yuan has decreased in value against the euro by 8 percent since mid-2005, the Chinese currency has also increased in value against the dollar by 10 percent. Europe's problem is that the yuan's value is tied to the dollar. The yuan can fluctuate by only three tenths of one percent per day against the U.S. dollar.
The Chinese government has embraced a policy it calls "gradualism" in freeing up the yuan. Quick changes in the value of the yuan seem unlikely. In the meantime, the European trade deficit with China is now bigger that the U.S. trade deficit with China - and growing more quickly.
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