Chinese President Hu Jintao said Beijing’s currency policy, which is being attacked by the United States and the European Union because maintaining a low yuan in order to increase exports, is coherent and responsible.
“To improve the trade imbalance, the parties concerned should change the pattern of their development, their economic restructuring and promoting free and fair trade, fight against every form of trade protectionism,” Hu told the daily Le Figaro on Tuesday, ahead of his visit to France this week, as cited from AFP.
“China’s currency policy is coherent and responsible. We have been continuing to work to improve the yuan exchange rate mechanism reform,” he said, noting that China’s currency has risen almost 24 percent since 2005.
United States and European Union both say that Beijing maintains the yuan “undervalued” (below the true value), thereby increasing the export of their costs, as reflected in the massive trade deficit that they are run by Chinese. Behind China say the problem is of their own actions and they need to change policy.
Beijing insisted that it would not suppress a big revaluation of the yuan, but let the currency go up with additional measures for China’s economy develops and becomes more open. ”We continue to refine, in accordance with the principles of independence, control and progress, our exchange rate mechanism … to allow for a bigger place for the law of supply and demand and to increase the flexibility of the yuan, so as to maintain the relative stability of our currency a reasonable and balanced level, “said the Chinese president.
Currency policy in general and in particular the yuan would appear most cryptic in the Group of 20 summit in South Korea later this month, with plans for U.S. President Barack Obama talks with counterparts from China amid rising between the two largest economies of the world in this matter.
Turning to his visit to France, which begins on Thursday, Hu told Le Figaro that China wants to go beyond trade issues and simple investment to create “equal partnership” with Paris. China hopes to find “a new partnership in energy, environment, information technology, high-end industrial, new energy sources and new materials,” said Hu.