Europe still wants revalued Yuan

Marketplace Staff Nov 26, 2007


Scott Jagow: The big story this morning is this deal between Airbus and China: 160 passenger jets, $15 billion. It’s great for Airbus, but European companies still have a problem. The strength of the euro against the dollar is eating away at their profits.

European officials are in China this week to talk about their trade status. Bill Marcus has more from Shanghai.

Bill Marcus: European consumer purchases of Chinese goods are exploding because of a weaker dollar and a stronger euro. That’s why European manufacturers are losing ground. At the same time, China isn’t rolling out the red carpet for foreign investment like it used to.

European Trade Commissioner Peter Mendelson has a solution, but it’s not a new one. Like the U.S., he wants China to revalue its currency.

Economist Arthur Kroeber:

Arthur Kroeber: I think the Chinese government’s point of view is that the sudden changes in the value of the currency are a bad thing because it diminishes business confidence. You know, if you’re a business and you’re trying to plan for the next two or three years, you want a predictable environment.

Chinese leaders want a trading status that’ll insulate them from tariffs, and restrictions lifted on high-tech exports imposed after the Tiananmen uprising.

In Shanghai, I’m Bill Marcus for Marketplace.

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