Stop nagging China to revalue: ex-EU chief Prodi

BEIJING (BestGrowthStock) – Foreign pressure on China to let the yuan rise is counterproductive and doomed to fail, former European Commission President Romano Prodi said on Monday.

“The higher the rank of a politician who declares China must revalue the renminbi, the longer the delay will be in the possible revaluation. You can almost have a mathematical formula,” Prodi told a European Union Chamber of Commerce lunch.

Premier Wen Jiabao on Sunday rebuffed international calls for a stronger yuan, saying that China would steer its own course and denying that the currency is undervalued.

U.S. President Barack Obama urged China last Thursday to adopt a more market-oriented exchange rate — code for letting the yuan strengthen.

“I don’t know why these declarations are done. The moment you are becoming more and more assertive, like China is now, how can you accept that somebody from the outside dictates that the renminbi be revalued tomorrow?” said Prodi, a visiting professor at the China Europe International Business School.

“So if we go on with declarations, a revaluation will never happen,” Prodi, a former prime minister of Italy, added.

He said China’s accumulation of a large stockpile of U.S. Treasury bonds had translated directly into global financial power; Beijing could now demand a seat at the table so its voice was heard on issues that concern it.

“The G20 is a very concrete, political consequence of that,” Prodi said.

Since the global credit crunch, the G20 group of developed and emerging economies — of which China is a member — has supplanted the Group of Seven rich industrial nations as the premier forum for coordinating international economic policy.

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(Reporting by Alan Wheatley; Editing by Ken Wills)

Stop nagging China to revalue: ex-EU chief Prodi