November 30, 2009

No Word on Yuan at EU-China Summit

The 12th EU-China Summit concluded in Nanjing (capital of Jiangsu Province) today and the official statement contains not one character or word on China's currency. Outside the forum at the WTO headquarters in Geneva Minister for Commerce Chen Deming intimated that the USA was to blame for its policy to devalue the dollar. The EU and USA have now concluded several high-level talks with no official word on the Chinese currency. It is apparent that the exchange rate of the Yuan is a plaything of politicians only. All talk of China "manipulating" its currency is merely pandering to voters in election districts hard hit by aging industry and rising poverty. Absent a complete breakdown in global trade and a worldwide trade war, the EU and USA are powerless over Renminbi.

The EU is now China's number 1 trading partner. For the EU China is now number 2 after the USA. EU imports from China are down in the great recession to just over $65 billion euros in the 1st Half of 2009. Overall China accounts for 17% of all EU imports. As in the USA China is a growing market for exports accounting for 7% of EU exports, up one percent from 2008. The top EU exporters to China are Germany, France, Italy, UK, and Netherlands - in that order. While the EU overall has a trade deficit with China, the smallest individual deficits are in Germany and France which have the healthiest trade relations with China. Click here for more detail on EU-China trade....

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