News / Asia

New Fears of A "Currency War"

China's Prime Minister Wen Jiabao (l) and European Union Council President Herman Van Rompuy are seen following the signing ceremony of two agreements between the European Union and China at the EU Council building in Brussels, Belgium, October 6, 2010
China's Prime Minister Wen Jiabao (l) and European Union Council President Herman Van Rompuy are seen following the signing ceremony of two agreements between the European Union and China at the EU Council building in Brussels, Belgium, October 6, 2010
Les Carpenter

After China met with European Union leaders Wednesday in a one-day summit in Brussels,one major disagreement remained.  

European leaders urged China to allow its currency, the yuan, to appreciate more rapidly, just as the United States has urged.  But Chinese Premier Wen Jiabao resisted, saying that instead, Europe and the United States should lessen their pressure for China to make such changes.

Mr. Wen said that while some U-S congressmen, among others, have called for a rapid increase in the appreciation of the yuan, there are reasons why it would not be such a good idea.

"If China is going to raise its exchange rates by 20 to 40 percent then many of our export companies will have to close down.  Then those enterprise employees will lose jobs and migrant workers will have to return to their villages.  That will give rise to social turmoil."

Mr. Wen added that that would not be a good thing for the world economy.  China says the problem with trade imbalances between China and Europe, and the U-S, for that matter, has more to do with the structure of their economies than with the yuan exchange rate.  

Such words and disagreements along with recent efforts by Japan, South Korea, Taiwan and Thailand, as well as others to weaken their currencies in an attempt to boost exports have led some to suggest there could be what's being termed a global "currency war" brewing.  

However, Marc Chandler, chief currency strategist at Brown Brothers Harriman & Company told Bloomberg News there is really no reason for a "currency war."

"I think there's a fundamental difference between China's slowdown, or the currency's rise and trying to knock it down, that is devalue it."  "To me," Chandler added, " I'd say there'll be no currency war because these countries that are trying to take action all have rising currencies.  All those countries are really talking about is modifying the pace of acceleration."

Mr. Wen's meeting in Brussels is seen as an important precursor to next month's gathering in Seoul, South Korea of the group of 20 wealthy developing nations who will be trying to resolve the major regulatory issues in the aftermath of the 2008 financial crisis.  The questions about currency valuations will most likely be high on the G-20 agenda.

You May Like

Multimedia US Defense Secretary: Iraqi Forces Lack 'Will to Fight'

Ash Carter criticizes Iraq's reaction to Islamic State; National Security Advisor Susan Rice echoed Carter's concerns in an interview on CBS More

Boko Haram Surrounds Havens With Land Mines

Chad and Cameroon say huge numbers of land mines planted by Boko Haram fighters along Cameroon's border with Nigeria are a danger to people, livestock and soldiers More

Women Peace Activists Cross Korean DMZ

Governments of Koreas give international delegation of women peace activists permission to pass through heavily fortified border, but some critics say symbolic crossing only benefits Pyongyang More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Turkey's Main Opposition Party Hopes for Election Breakthroughi
X
May 22, 2015 10:23 AM
Turkey’s main opposition Republican People’s Party has sought an image change ahead of the June 7 general election. The move comes after suffering successive defeats at the hands of the Islamist-rooted AK Party, which has portrayed it as hostile to religion. Dorian Jones reports from the western city of Izmir.
Video

Video Turkey's Main Opposition Party Hopes for Election Breakthrough

Turkey’s main opposition Republican People’s Party has sought an image change ahead of the June 7 general election. The move comes after suffering successive defeats at the hands of the Islamist-rooted AK Party, which has portrayed it as hostile to religion. Dorian Jones reports from the western city of Izmir.
Video

Video Europe Follows US Lead in Tackling ‘Conflict Minerals’

Metals mined from conflict zones in places like the Democratic Republic of Congo are often sold by warlords to buy weapons. This week European lawmakers voted to force manufacturers to prove that their supply chains are not inadvertently fueling conflicts and human rights abuses. Henry Ridgwell reports from London.
Video

Video Class Tackles Questions of Race, Discrimination

Unrest in some U.S. cities is more than just a trending news item at Ladue Middle School in St. Louis, Missouri. As VOA’s Kane Farabaugh reports, it’s a focus of a multicultural studies class engaging students in wide-ranging discussions about racial tensions and police aggression.
Video

Video Mind-Controlled Prosthetics Are Getting Closer

Scientists and engineers are making substantial advances towards the ultimate goal in prosthetics – creation of limbs that can be controlled by the wearer’s mind. Thanks to sophisticated sensors capable of picking up the brain’s signals, an amputee in Iceland is literally bringing us one step closer to that goal. VOA’s George Putic reports.
Video

Video Afghan Economy Sinks As Foreign Troops Depart

As international troops prepare to leave Afghanistan, and many foreign aid groups follow, Afghans are grappling with how the exodus will affect the country's fragile economy. Ayesha Tanzeem reports from the Afghan capital, Kabul.
Video

Video Poverty, Ignorance Force Underage Girls Into Marriage

The recent marriage of a 17-year old Chechen girl to a local police chief who was 30 years older and already had a wife caused an outcry in Russia and beyond. The bride was reportedly forced to marry and her parents were intimidated into giving their consent. The union spotlighted yet again the plight of many underage girls in developing countries. Zlatica Hoke reports poverty, ignorance and fear are behind the practice, especially in Asia and Africa.
Video

Video South Korea Marks Gwangju Uprising Anniversary

South Korea this week marked the 35th anniversary of a protest that turned deadly. The Gwangju Uprising is credited with starting the country’s democratic revolution after it was violently quelled by South Korea’s former military rulers. But as Jason Strother reports, some observers worry that democracy has recently been eroded.
Video

Video California’s Water System Not Created To Handle Current Drought

The drought in California is moving into its fourth year. While the state's governor is mandating a reduction in urban water use, most of the water used in California is for agriculture. But both city dwellers and farmers are feeling the impact of the drought. Some experts say the state’s water system was not created to handle long periods of drought. Elizabeth Lee reports from Ventura County, an agricultural region just northwest of Los Angeles.
Video

Video How to Clone a Mammoth: The Science of De-Extinction

An international team of scientists has sequenced the complete genome of the woolly mammoth. Led by the Swedish Museum of Natural History in Stockholm, the work opens the door to recreate the huge herbivore, which last roamed the Earth 4,000 years ago. VOA’s Rosanne Skirble considers the science of de-extinction and its place on the planet
Video

Video Blind Boy Defines His Life with Music

Cole Moran was born blind. He also has cognitive delays and other birth defects. He has to learn everything by ear. Nevertheless, the 12-year-old has had an insatiable love for music since he was born. VOA’s June Soh introduces us to the young phenomenal harmonica player.

VOA Blogs