Recently, the RMB exchange rate issue has again become the focus of international attention. Following the U.S. House of Representatives voted Sept. 29 special tariff bill in the Asia-Europe summit meeting held last week during the Euro Group’s “Troika” will put pressure on the yuan. This is clearly unwise.

EU pressure on the RMB, and the United States is guilty of the same error. EU and U.S. economic recovery difficult decisions the euro and the dollar weakening, the current RMB exchange rate against the euro and the dollar is not the result of normal economic conditions, the EU and the U.S. can not excuse its own economic difficulties, to ask the Chinese to take them to create domestic employment costs.

First, the resulting imbalance in international trade is not the main reason for the RMB exchange rate, but rather the structure of international investment and trade, which is the inevitable result of globalization and industrial division. From the data, the trade surplus mainly within multinationals in manufacturing, just as the same appreciation of the yen would only stop the growth of the Japanese economy, but would not achieve any other effect.

Second, the RMB appreciation will not only solve the problem, but also make things worse. If the yuan appreciated dramatically in a short time, China’s export enterprises will be going bankrupt, there will be tens of millions of workers unemployed, affect social stability, undermine China’s financial sector stability, and therefore harmful to the Chinese economy. In 2009, China’s contribution to world economic growth rate of 50%; 2009, the overall decline in EU exports, but exports to China increased by 4% during the first half of this year is the EU exports to China grew by 42%. If China’s economic and social problems, will bring disaster to the world, the EU is also spared.

Third, the recent fluctuation of the euro exchange rate is a “weak dollar” policy caused, at present, the world’s biggest problem is not renminbi revaluation, but the U.S. should stop depreciation. U.S. exports of Obama’s plan to double the Government, not by raising production efficiency and technological innovation to increase exports, not by open markets, reduce restrictions on exports to increase exports, but the expected depreciation of the dollar, lowering the price of traditional manufactured goods, and other industrialized competition and emerging market countries. The similarity of the industrial structure, the European countries have been more severe damage to the dollar, including the EU, China is a “weak dollar” policy of the victims. In opposition to “weak dollar” policy, consistent with the interests of China and the EU should jointly counter the U.S. deliberately provoked war shifted the currency crisis, to boycott the U.S. dollar hegemony, to work together to build a fair, just, inclusive and orderly international monetary and financial new world order .

Fourth, the EU is China’s strategic partner, in response to the financial crisis, difficult times, China did not do nothing to help Greece, Iceland, Spain, Portugal, Italy and other countries through the crisis, China’s purchasing delegation to Europe multiple batches powerful driving force in Europe the recovery of the manufacturing sector, China’s firm support to help the European economy out of trouble. The EU is China’s largest trading partner, China is the EU important export market, if the added pressure of RMB appreciation in Europe of action, will undoubtedly damage the trade relations between China and Europe, from the overall situation into account, China and the EU should stand in the same front.

We hope and believe that the EU leaders, entrepreneurs and politicians, business insight, able to “calm, wisdom and courage” to face the reality objectively and fairly, fully aware of China’s economic restructuring, increase imports, to achieve economic balance RMB exchange rate reform, growth and achieved remarkable results, fully aware of China and the EU share broad common interests, good partners and good friends. Whether from the EU’s own interests or facts, the EU should correctly deal with the RMB exchange rate issue, do not join the U.S. pressure the international chorus of appreciation, in line with the EU’s interests in China’s interest, but also on the world economy.

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Category: Business Management
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