Page last updated at 10:52 GMT, Monday, 30 November 2009

China rejects EU call to let its currency appreciate

European Commission President Jose Manuel Barroso (L) and Chinese Prime Minister Wen Jiabao (R) in Nanjing - 30 November 2009
Mr Barroso (L) and Mr Wen did not see eye to eye on currency rates

Chinese Prime Minister Wen Jiabao has rejected European pressure to let its currency rise against the Euro.

Speaking at a summit with EU leaders in Nanjing, Mr Wen said it was unfair of Europe to demand exchange rate changes while maintaining trade protectionism.

For the last 18 months, China has kept the yuan pegged to the weakening US dollar, hurting EU exports to China.

Mr Wen said maintaining China's exchange rate at a stable level had helped the world economic recovery.

Speaking after talks with European leaders and officials, Mr Wen said China would maintain what he called a reasonable and balanced exchange rate.

He said the stability of the yuan against the dollar had benefited China's economic development as well as the global recovery.

Mr Wen condemned countries that demand an appreciation of the yuan while engaging in "brazen trade protectionism against China".

He added: "This is unfair. In fact, this amounts to restricting China's development."

Briefing cancelled

The EU is China's largest market, accounting for about 20% of China's exports.

On Sunday, European Commission President Jose Manuel Barroso had urged China to address the EU's currency concerns.

"Major imbalances because of trade or because of currencies can create problems in the future if they are not fully addressed, he said.

But at the close of the two-day meeting on Monday he did not mention the currency issue in remarks to reporters and a joint China-EU statement did not mention the exchange rate discord.

After Mr Wen's firm rejection of the Europeans' call to adjust the yuan, EU officials cancelled a final news conference.

China has said in the past that it wants its currency to be internationally convertible but has appeared reluctant to relinquish state control of the currency and economic policy in general.

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