Monday, November 30, 2009

Wen Rails at ‘Unfair’ Renminbi Pressure

China’s premier Wen Jiabao showed his mercantilist colors on Monday as he lashed out at the growing number of countries pressuring Beijing to strengthen its currency, making it clear that European officials made little headway in their efforts over the past two days to persuade the country to allow the renminbi to appreciate.

Speaking at the conclusion of an EU-China summit in the eastern Chinese city of Nanjing, Wen said: “Some countries on the one hand want the renminbi to appreciate, but on the other hand engage in brazen trade protectionism against China. This is unfair. Their measures are a restriction on China’s development.”

The premier repeated the standard form of words Beijing uses to describe its currency policy. Mr Wen said: “We will maintain the stability of the renminbi at a reasonable and balanced level ... maintaining the basic stability of the renminbi exchange rate has benefited China’s economic development and benefited world economic recovery.”

While China's continued efforts at propping up the dollar hurt Chinese consumers and fuel price inflation in China, it is truly absurd for the U.S. to be concerned about Chinese mercantilist activities. China's propping of the dollar has suffocated U.S. price inflation and has been a major benefit to U.S. consumers.

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