Not if; not Wen

Posted on Thursday, 23 September 2010 [GMT +1]

Should anyone have been surprised by Chinese Premier Wen Jiabao’s tone in New York yesterday, where he vigorously defended China’s stance on the Yuan? He also said that acquiescing to calls for a 20% rise in the currency would cause severe job losses and major social upheaval. More telling, however, he said that the Yuan’s value is not the cause of the US trade deficit – rather it is the structure of investment and savings.

China’s exports are focused on labour intensive manufacturing and “the US has long since stopped producing many of these products. If the US doesn’t import from China, it will import from somewhere else”. The two countries should instead focus on boosting exports to China, said Wen. Indeed, the Chinese Government is committed to boosting domestic consumption to help rebalance trade, he added. Similarly, China’s trade surplus as a percentage of its economy has been declining in recent years, and both China and the US must reject trade protectionism.

Best of all, though, after meeting former Secretary of State Henry Kissinger, Wen said that the current national differences between the China and the US are “very easy to resolve” when compared with “the challenges that Dr Kissinger faced in those early days”.

“Most foreign policies that history has marked highly, in whatever country, have been originated by leaders who were opposed by experts”. Henry Kissinger

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Headlines

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