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

Video China Investigates Powerful Former Security Chief

Analysts say move by President Xi is an effort to win more party support, take step toward economic reforms, removing those who would stand in way of change More

South Africa Land Reforms Still Contentious 20 Years Later

Activists argue that the pace of land reform is slow and biased; legal experts question how some proposed reforms would be implemented More

In Vietnam, Religious Freedoms Violated, UN Finds

Beliefs reportedly prompt heavy surveillance, intimidation and travel restrictions 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.
Information War Rages Alongside Real One in Ukrainei
X
Al Pessin
July 31, 2014 8:13 PM
The downing of the Malaysian airliner two weeks ago, and allegations that Russians are shelling Ukrainian troops across the border, have moved the information war swirling around the Ukrainian conflict to a new level. VOA's Al Pessin reports from Kyiv.
Video

Video Information War Rages Alongside Real One in Ukraine

The downing of the Malaysian airliner two weeks ago, and allegations that Russians are shelling Ukrainian troops across the border, have moved the information war swirling around the Ukrainian conflict to a new level. VOA's Al Pessin reports from Kyiv.
Video

Video When Fighting Eases, Gazans Line Up at Bakeries

When there is a lull in the conflict in Gaza, residents who have been hunkered down in their apartments rush out to stock up on food and other necessities. Probably the most important destination is the local bakery. VOA’s Scott Bobb reports from Gaza City.
Video

Video US-Funded Program Offers Honduran Children Alternative to Illegal Immigration

President Obama and Central American leaders recently agreed to come up with a plan to address poverty and crime in the region that is fueling the surge of young migrants trying to illegally enter the United States. VOA’s Brian Padden looks at one such program in Honduras - funded in part by the United States - which gives street kids not only food and safety but a chance for a better life without, crossing the border.
Video

Video 'Fab Lab' Igniting Revolution in Kenya

The University of Nairobi’s Science and Technology Park is banking on 3-D prototyping to spark a manufacturing revolution in the country. Lenny Ruvaga has more for from Nairobi's so-called “FabLab” for VOA.
Video

Video Gazans in Shelled School Sought Shelter

Israel's air and ground assault against Hamas-led fighters in Gaza has forced many Palestinians to flee their homes, seeking safety. But safe places are hard to find, as VOA’s Scott Bobb reports from Jabaliya.
Video

Video Rapid Spread of Ebola in West Africa Prompts Global Alert

Across West Africa, health officials are struggling to keep up with what the World Health Organization describes as the worst ebola outbreak on record. The virus has killed hundreds of people this year. U.S. President Barack Obama and other world leaders are watching the developments closely as they weigh what actions, if any, are needed to help contain the disease.
Video

Video Michelle Obama: Young Africans Need to Embrace Women's Rights

U.S. first lady Michelle Obama urged some of Africa's best and brightest to advocate for women's rights in their home countries. As VOA's Pam Dockins explains, Obama spoke to some 500 participants of the Young African Leaders Initiative, a six-week U.S.-based training and development program.
Video

Video Immigrant Influx on Texas Border Heats Up Political Debate

Immigrants from Central America continue to cross the U.S.-Mexico border in south Texas, seeking asylum in the United States, as officials grapple with ways to deal with the problem and provide shelter for thousands of minors among the illegal border crossers. As VOA's Greg Flakus reports from Houston, the issue is complicated by internal U.S. politics and U.S. relations with the troubled nations that immigrants are fleeing.
Video

Video Study: Latino Students Most Segregated in California

Even though legal school segregation ended in the United States 60 years ago, one study finds segregation still occurs in the U.S. based on income and race. The University of California Los Angeles Civil Rights Project finds that students in California are more segregated by race than ever before, especially Latinos. Elizabeth Lee reports for VOA from Los Angeles.

AppleAndroid