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EU Official Urges China to Increase Market Access, Reform Currency

A top European Union official says China needs to increase market access for European goods and services and reform its currency exchange rate. Daniel Schearf reports from Beijing that the EU hopes such steps will ease growing frictions over China's enormous trade surplus with the 27-nation bloc.

EU Internal Market and Services Commissioner Charlie McCreevy told reporters Tuesday there is continuing pressure from the bloc's member states for China to do more to lower its trade surplus with the EU

He says if Beijing wants to ease that pressure, it should speed up granting EU companies access to the Chinese market.

"I think it is only fair to everybody that, if there continues to be unregulated access to the European markets for Chinese goods and products and services, then the same can apply, should apply, over a period of time to European goods, products and services," McCreevy said.

The EU says its trade deficit with China last year reached nearly $171 billion and this year could top $227 billion.

McCreevy says the exchange rate of the Chinese currency, which many analysts say is undervalued - making Chinese exports cheaper, is also influencing the enormous trade surplus.

"I think it is not a secret to say the world has been looking to China to make some changes vis-à-vis the exchange rate of the currency. This has been ongoing for some time. It contributes to the trade surpluses that China has with the rest of the world, and with Europe in particular," McCreevy said.

China's biggest individual trade surplus is with the United States, the largest in history last year, at $232 billion.

U.S. lawmakers plan this week to propose legislation that would impose tariffs on Chinese goods if Beijing does not raise the value of its currency, which the U.S. says is undervalued by as much as 40 percent.

China's Foreign Ministry spokesman Qin Gang Tuesday warned the proposed bill would politicize trade. He said the exchange rate must suit China's situation and benefit the country's economic development.