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Obama to target yuan again
Global Times | November 11, 2011 01:15
By Yang Jingjie
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Chinese President Hu Jintao has a meeting with his U.S. counterpart Barack Obama in Cannes, France, Nov. 3, 2011. Photo: Xinhua

 

The White House revealed Wednesday that the US would confront China over the yuan appreciation issue during the Asia Pacific Economic Cooperation (APEC) summit in Hawaii this weekend, but analysts warned that such an action would be futile.

"I'm sure that President Barack Obama will be raising with his Chinese counterpart, Hu Jintao, the broader need for global growth that is supported by demand in China and other emerging economies. Currency is a part of that picture," Ben Rhodes, Obama's deputy national security advisor, said during a press briefing at the White House.

"They have taken steps on currency, but, again, we don't believe that those are sufficient," Rhodes added.

The US president will host Hu in Honolulu, his birthplace, on Saturday on the sidelines of the summit, which is held under the theme of "seamless regional economy."

The value of the yuan is one of the major disagreements between the two sides. Washington has accused Beijing of deliberately keeping the yuan low to gain a trade surplus, but China rejects the claims and blames US restrictions on high-tech exports for fueling the imbalance.

Lu Jianren, a researcher with the Institute of Asia-Pacific Studies (IAPS) at the Chinese Academy of Social Sciences, told the Global Times that Hu is likely to repeat his warning to Western countries over the issue made during the G20 summit in Cannes last week, and that China would stick to its position on the value of the yuan.

Rhodes' remarks came shortly after US authorities opened an investigation into whether China sells solar panels in the US at unfair prices. China's Ministry of Commerce expressed grave concerns and dissatisfaction over the probe on Wednesday.

"As a big producer of environmental technology, the US hopes to sell its green technology products to developing countries. China is at a different stage of development, and its local green-tech companies cannot reach the US standard. Both sides should solve the disagreement through negotiations," Lu said.

As one of the topics of the APEC summit, Washington is proposing that APEC members pledge tariff cuts on environmental goods and services, such as solar panels, wind and hydraulic turbines, to five percent by the end of 2012, and slash energy intensity by half the 2005 levels by 2035.

Assistant Foreign Minister Wu Hailong said Monday that APEC members generally hold positive attitudes toward US proposals in various fields such as green growth and innovation policy.

"But some of the outcomes expected by the US are beyond the capacity of the developing members, and they have expressed their difficulties and concerns," Wu said.

Another major issue at the summit will be the Trans-Pacific Partnership (TPP) trade deal. Nine countries - the US, Australia, New Zealand, Vietnam, Malaysia, Singapore, Brunei, Chile and Peru - are expected to say Saturday that they have reached the broad outlines of the TPP.

Reuters commented that the TPP pact, a possible template for an APEC-wide trade zone, would help inject the US into the heart of Asia's regional trade architecture.

China has not been invited to the partnership, and Assistant Commerce Minister Yu Jianhua told a briefing Monday that any such mechanism should be "open and inclusive" rather than exclusive, and should not replace multilateral regimes, such as the one proposed under the ongoing Doha round of trade negotiations.

Shen Minghui, another researcher with the IAPS, said being excluded from the TPP would affect China's trade.

"I think China is willing to join the TPP, but is blocked by harsh prerequisites to gaining membership. The US raised the threshold on purpose to set obstacles for China," Shen said.

Yu said Monday that in general, "TPP has set very high benchmarks. We'll have to wait and see whether or not all these members will reach that high benchmark."

Lu noted that a number of countries involved in the TPP overlap with those in the 10+3 model (10 countries of ASEAN and China, Japan and South Korea), which will weaken the East Asian economic integration advocated by China.

Apart from regional issues, the summit is also being overshadowed by the ongoing eurozone debt crisis. An unnamed US official told AFP that the summit will produce a "strong communiqué" on the situation in Europe when it ends Sunday.

Australian Treasurer Wayne Swan urged unity among Asia-Pacific countries, saying every APEC economy had felt the "chill wind" of economic events in Europe as well as the US, where the recovery has moved in fits and starts.

Agencies contributed to this story





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