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China brushes off EU concerns over weak yuan

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China brushes off EU concerns over weak yuan

China has warned the EU and allies (read US) that an appreciation in its yuan currency could hobble the country’s red-hot growth -- growth which has been averaging about 8% a year for the past 30 years and that has driven the global economy. Chinese Prime Minister Wen Jiabao says the yuan will be kept steady as a result of the tailwinds buffeting hopes of a world economic recovery. But more is at stake over the strength of the yuan. China says countries that want the currency to appreciate also engage in trade protectionism, which restricts China’s development (and thereby restricts growth elsewhere). But the EU says a weak yuan combined with a weak dollar hurts European exports. Somehow, we don’t think the Chinese will be too worried about that. Read more: The New York Times

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