Sarkozy calls publicly for Hu to let yuan rise

Mon Nov 26, 2007 5:44am GMT
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By Tim Hepher and Emmanuel Jarry

BEIJING, Nov 26 (Reuters) - French President Nicolas Sarkozy used a state visit to China on Monday to publicly urge President Hu Jintao to let the yuan rise more swiftly against Europe's single currency.

The European Union has been ratcheting up pressure on Bejing to correct what it sees as the Chinese currency's unfair undervaluation, but Sarkozy eschewed all diplomatic niceties by urging Hu to his face to take action.

"We need to arrive at currency rates that are harmonious and fair," Sarkozy said at a joint media appearance. China, he said, should "accelerate the appreciation of the yuan against the euro".

Hu stood impassively as he listened to Sarkozy, who also said China had growing global responsibilities on issues such as the environment.

While the Chinese currency has climbed 9 percent against the dollar since its landmark 2.1 percent revaluation in July 2005, it has fallen about 11 percent in total against the euro.

The euro's strength is causing growing consternation in the EU, whose trade deficit with China is soaring.

Despite worries that the euro is denting Europe's competitiveness, plane maker Airbus clinched its largest order to date when China signed a framework agreement to buy 160 planes worth $17 billion before discounts. The order topped a contract last year from China to buy 150 aircraft.

In addition, China agreed to take a 5 percent risk-sharing stake in the development of the A350. The $10 billion project is Airbus's attempt to catch up with Boeing's 787 Dreamliner in the fast-growing mid-sized jetliner market.  Continued...

 
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