Report: China's Central Bank Chief Says Beijing Wants Strong Dollar.
The head of China's central bank says Beijing wants a strong dollar, a government news agency said Thursday. Zhou Xiaochuan, governor of the People's Bank of China, made the comment to U.S. Treasury Secretary Henry Paulson at a conference in South Africa, the Xinhua News Agency said.
"Zhou said he told Paulson China hopes to see a strong dollar," Xinhua reported. It said Zhou was responding to Paulson's prediction of a long-term recovery of the weakening dollar, which fell to another record low against the euro Thursday. Zhou's comments put "weight behind the slumping currency," Xinhua said.
The U.S. dollar has been falling against the euro, yen and other major currencies amid fears for the health of the American economy, stoked by the subprime mortgage crisis. Concerns about the United States' huge trade deficit, which leaves more dollars in the hands of foreigners, also is weighing on the currency. On Thursday, the dollar rebounded slightly against the yen, inching back up to 108.70 yen after touching a 2 1/2-year low of 108.25 yen overnight. But the euro continued to rise to new highs, climbing as high as $1.4873.
China keeps a large share of its $1.43 trillion in reserves in dollar-denominated assets such as U.S. Treasuries, which means a falling dollar erodes the value of its holdings. Financial markets are watching to see whether Beijing shifts to a stronger currency such as euros.
Zhou said that only when the dollar "devalues drastically can it be called weak, the scenario of which is likely to bring uncertainty to the world economy, to the reluctance of all parties concerned," Xinhua reported.
Zhou and Paulson were attending a meeting in South Africa of the G20, which groups together the world's 20 biggest economies.
European Companies Call Out China on Trade
European companies say China is trying to avoid carrying out WTO pledges. They believe China is trying to avoid fully carrying out its free-trade pledges, according to a survey released Thursday ahead of a visit by European Union leaders for talks on trade, currency and other disputes.
The report by the European Chamber of Commerce in China adds to mounting complaints that Beijing is violating World Trade Organization commitments by trying to nurture Chinese companies at the expense of foreign rivals. "People see that government bodies are trying to avoid (carrying out WTO pledges) more actively, so that is bad news," Joerg Wuttke, president of the European chamber, said at a news conference.
European leaders plan to lobby China to lower barriers to imports and foreign investment and ease currency controls when the two sides meet next week in Beijing, according to EU officials. Europe has shown greater urgency lately about pressing China for action to narrow its swelling trade surplus, an area where Washington has long taken the lead in lobbying Beijing.
Both the U.S. and EU accuse China of improperly using tax, investment and other policies to promote the growth of Chinese champions in industries ranging from oil to banking while putting foreign companies at a disadvantage.
The investment climate is "not getting better," said Wuttke, who is the China manager for German chemical company BASF AG. He cited rules on auto parts imports and access to its retail gasoline and diesel market as areas where China is violating promises to give foreign companies equal treatment. The number of European companies complaining about China's rampant product piracy is about the same as last year, he said.
The EU delegation is led by the president of the European Commission, Jose Manuel Barroso, and Prime Minister Jose Socrates of Portugal, which holds the rotating presidency of the 27-nation group.
Also next week, European currency officials are to meet separately with Chinese officials to seek an easing of controls on China's currency, the yuan. The EU, United States and other trading partners say the yuan is kept undervalued, giving Chinese exporters an unfair price advantage and adding to the country's surplus.
China's trade surplus with Europe, its biggest trading partner, rose nearly 50 percent to $13.9 billion in October over the same month in 2006, according to the government.
The survey of 220 European companies found "the majority are skeptical about the government's ability and willingness to implement WTO regulations," said a report by the European chamber. Some 38 percent thought Beijing is "actively seeking loopholes to circumvent, avoid or delay" carrying out WTO pledges, it said. Such sentiment was strongest among companies selling consumer goods and professional services such as accounting, the chamber said.
The American and European chambers of commerce both have complained that regulators are trying to protect Chinese companies by obstructing foreign investment in banking and other industries. Washington has filed a WTO case challenging China's use of different tax rates to encourage automakers to use domestically made parts. Foreign oil companies that want to set up filling stations say they face obstacles because China's refineries are controlled by two state companies.
At the meetings next week, "we hope that the leaders of both nations will discuss opening their markets or keeping them open and try to get rid of protectionist arguments in both regions," Wuttke said.
The head of China's central bank says Beijing wants a strong dollar, a government news agency said Thursday. Zhou Xiaochuan, governor of the People's Bank of China, made the comment to U.S. Treasury Secretary Henry Paulson at a conference in South Africa, the Xinhua News Agency said.
"Zhou said he told Paulson China hopes to see a strong dollar," Xinhua reported. It said Zhou was responding to Paulson's prediction of a long-term recovery of the weakening dollar, which fell to another record low against the euro Thursday. Zhou's comments put "weight behind the slumping currency," Xinhua said.
The U.S. dollar has been falling against the euro, yen and other major currencies amid fears for the health of the American economy, stoked by the subprime mortgage crisis. Concerns about the United States' huge trade deficit, which leaves more dollars in the hands of foreigners, also is weighing on the currency. On Thursday, the dollar rebounded slightly against the yen, inching back up to 108.70 yen after touching a 2 1/2-year low of 108.25 yen overnight. But the euro continued to rise to new highs, climbing as high as $1.4873.
China keeps a large share of its $1.43 trillion in reserves in dollar-denominated assets such as U.S. Treasuries, which means a falling dollar erodes the value of its holdings. Financial markets are watching to see whether Beijing shifts to a stronger currency such as euros.
Zhou said that only when the dollar "devalues drastically can it be called weak, the scenario of which is likely to bring uncertainty to the world economy, to the reluctance of all parties concerned," Xinhua reported.
Zhou and Paulson were attending a meeting in South Africa of the G20, which groups together the world's 20 biggest economies.
European Companies Call Out China on Trade
European companies say China is trying to avoid carrying out WTO pledges. They believe China is trying to avoid fully carrying out its free-trade pledges, according to a survey released Thursday ahead of a visit by European Union leaders for talks on trade, currency and other disputes.
The report by the European Chamber of Commerce in China adds to mounting complaints that Beijing is violating World Trade Organization commitments by trying to nurture Chinese companies at the expense of foreign rivals. "People see that government bodies are trying to avoid (carrying out WTO pledges) more actively, so that is bad news," Joerg Wuttke, president of the European chamber, said at a news conference.
European leaders plan to lobby China to lower barriers to imports and foreign investment and ease currency controls when the two sides meet next week in Beijing, according to EU officials. Europe has shown greater urgency lately about pressing China for action to narrow its swelling trade surplus, an area where Washington has long taken the lead in lobbying Beijing.
Both the U.S. and EU accuse China of improperly using tax, investment and other policies to promote the growth of Chinese champions in industries ranging from oil to banking while putting foreign companies at a disadvantage.
The investment climate is "not getting better," said Wuttke, who is the China manager for German chemical company BASF AG. He cited rules on auto parts imports and access to its retail gasoline and diesel market as areas where China is violating promises to give foreign companies equal treatment. The number of European companies complaining about China's rampant product piracy is about the same as last year, he said.
The EU delegation is led by the president of the European Commission, Jose Manuel Barroso, and Prime Minister Jose Socrates of Portugal, which holds the rotating presidency of the 27-nation group.
Also next week, European currency officials are to meet separately with Chinese officials to seek an easing of controls on China's currency, the yuan. The EU, United States and other trading partners say the yuan is kept undervalued, giving Chinese exporters an unfair price advantage and adding to the country's surplus.
China's trade surplus with Europe, its biggest trading partner, rose nearly 50 percent to $13.9 billion in October over the same month in 2006, according to the government.
The survey of 220 European companies found "the majority are skeptical about the government's ability and willingness to implement WTO regulations," said a report by the European chamber. Some 38 percent thought Beijing is "actively seeking loopholes to circumvent, avoid or delay" carrying out WTO pledges, it said. Such sentiment was strongest among companies selling consumer goods and professional services such as accounting, the chamber said.
The American and European chambers of commerce both have complained that regulators are trying to protect Chinese companies by obstructing foreign investment in banking and other industries. Washington has filed a WTO case challenging China's use of different tax rates to encourage automakers to use domestically made parts. Foreign oil companies that want to set up filling stations say they face obstacles because China's refineries are controlled by two state companies.
At the meetings next week, "we hope that the leaders of both nations will discuss opening their markets or keeping them open and try to get rid of protectionist arguments in both regions," Wuttke said.
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