WTO threat will not yield yuan rise -EU trade chief

BEIJING, April 27 (BestGrowthStock) – Threatening China with WTO
sanctions will not convince Beijing to revalue its currency, the
European Union trade chief said following a meeting with his
Chinese counterpart on Tuesday.

Chinese Commerce Minister Chen Deming said the yuan was not
undervalued and reiterated that China would only adjust the
currency’s exchange rate if it were beneficial to its own
economy, EU trade commissioner Karel De Gucht said.

“I am quite convinced that they are going to do it for
themselves and that openly insisting on it and even thinking
about procedures within the WTO … is not going to resolve the
matter,” De Gucht told reporters.

According to World Trade Organisation rules, countries are
not permitted to use their exchange rate policies to counteract
commitments to open trade. This stipulation about exchange rates
has never been tested in practice in a WTO case.

Beijing has locked the yuan in place at about 6.83 to the
dollar since mid-2008, trying to cushion its exporters from the
global financial crisis.

Some U.S. lawmakers have suggested that President Barack
Obama should think about challenging China’s currency policy at
the WTO.

House of Representatives Ways and Means Committee Chairman
Sander Levin said on Monday that filing a trade complaint at the
WTO was one of several options for exerting more pressure on
China if it does not resume yuan appreciation in the coming
months. [ID:nN26213969]

Despite the outside pressure, a constituency within China
has been making the case that it is in China’s best interests to
resume movement in the yuan exchange rate.

Ba Shusong, a senior economist with the State Council
Development Research Center, which advises the cabinet, said in
remarks published in the China Economic Times on Tuesday that
policy makers should focus more on “making the exchange rate
formation mechanism more flexible and marketised.”
[ID:TOE63Q078]

Investing Advice
(Reporting by Lucy Hornby; Editing by Ken Wills)

WTO threat will not yield yuan rise -EU trade chief