Eurozone finance ministers on Monday ratcheted up pressure on China to adjust the value of the yuan although they struggled with differences over the strength of the euro.
The ministers, gathered in Luxembourg, thrashed out a common position on exchange rates to bring to a meeting next week in Washington of finance chiefs from the G7 richest countries.
While sticking to their usual well-worn statement describing "excessive volatility" on foreign exchange markets as "undesirable," this time they also singled out China with a call for action to adjust the yuan's exchange rate.
"In emerging countries with large and growing current account surpluses, especially China, it is desirable that their effective exchange rates move so that necessary adjustments occur," the ministers said in an agreed statement.
China regularly comes under fire for artificially keeping down the value of its currency in order make its exports cheaper on international markets, which also has the effect of lifting the value of the euro.
Ministers also agreed to dispatch a delegation of eurozone powerbrokers to China to raise their concerns about exchange rates face-to-face with Chinese authorities.
ECB president Jean-Claude Trichet, EU Economic Affairs Commissioner Joaquin Almunia and chairman of the Eurogroup of finance ministers Jean-Claude Juncker would make the trip "by the end of this year," Juncker said.
But while China was specifically in the crosshairs, the ministers also took aim at the US and Japan in a common message that the eurozone is to deliver at the G7 meeting.
"First point China, second point dollar, third point yen," said Juncker, the chairman of the meeting.
"Concerning the dollar, we have noted with great attention that the US authorities have reaffirmed that a strong dollar is in the interest of the US economy," the ministers said in the statement.
On the yen, the ministers voiced concern that it too was undervalued and said that because Tokyo acknowledged that Japan was on a "sustainable growth path" that that "should be recognized by market participants."
With the euro on a record-smashing run, some eurozone members are becoming increasingly impatient for China, Japan and the US to take more action to strengthen their currencies.
The euro has risen more than 20 percent against the US dollar and yen since its launch in January 1999, and the appreciation has been around 10 percent in just the last 12 months.
China has allowed its currency to rise marginally versus the US dollar over the past two years but has let it slide against the euro in equal proportion, compounding the feeling that the euro zone is carrying the can for currency mismatches.
"We note that the euro is playing its role for an orderly reduction of the imbalances," the ministers said.
While a rising euro can help limit the cost of oil, which is priced in dollars, and thus curbs inflation, it makes it harder for exporters to compete on price in world markets, where the yuan also sets a benchmark for many others in Asia.
France has complained loudly in recent weeks about the strength of the euro, with clear support from Italy, but Germany, the world's top exporter, kept its distance.
German Finance Minister Peer Steinbrueck did so again on Monday, telling journalists as he entered the Luxembourg meeting: "I prefer a strong euro."
His Dutch and Austrian colleagues took a similar line.
That jarred with a campaign being waged by French President Nicolas Sarkozy, but French Finance Minister Christine Lagarde, regularly reduced to the role of emissary, said she was happy with the outcome of the talks.
"After good debates we came to final conclusions that we shared and that we all support in anticipation of the G7 meetings, so that is good, that is excellent," she said.
EXTRADITION DEAL? A former prosecutor said that the US Department of Justice might ask Taiwan to extradite the men in return for the US doing something in return The US won arrest warrants for three Taiwanese men — a former president of China-based Fujian Jinhua Integrated Circuit Co (福建晉華) and two engineers — charged with stealing secrets from Idaho-based Micron Technology Inc. The effort to apprehend the three men — former Fujian Jinhua president Stephen Chen (陳正坤), and Ho Chien-ting (何建廷) and Wang Yong-ming (王永銘), who work for Taiwan-based United Microelectronics Corp (UMC, 聯電) — is notable because they were charged in 2018 in the first case filed under the “China initiative” of US President Donald Trump’s administration targeting trade-secret theft, hacking and economic espionage. However, legal experts have said
There was a net reduction last year in the number of Taipei residents and this year is expected to set a 23-year high for population decline in the city, Ministry of the Interior statistics released yesterday showed. From January to last month, 18,861 more people moved out of Taipei than moved into the capital, an increase of 7,000 from the same period last year, the data showed. That is a 7.2 percent decrease in the city’s population since the start of the year, the biggest drop in both percentage and total number among all municipalities and counties nationwide, the data showed. The data
COUNCILS CLASH: The Mainland Affairs Council said a new office in Hong Kong is to assist people with issues related to investment, study and employment in Taiwan The Mainland Affairs Council (MAC) yesterday denied an accusation by the Hong Kong-Taiwan Economic and Cultural Co-operation and Promotion Council that its Taiwanese counterpart in the territory was “interfering with Hong Kong’s internal affairs.” The Hong Kong council leveled the accusation after Taipei’s Taiwan-Hong Kong Economic and Cultural Co-operation Council this month announced it would establish a Taiwan-Hong Kong Services and Exchanges Office to facilitate humanitarian aid for Hong Kongers. The new office is scheduled to begin operations on Wednesday. The MAC yesterday asked the Hong Kong council to “not misinterpret” the government’s intentions. The two Taiwan-Hong Kong councils were established in 2010 to
IRRESPONSIBLE ATTITUDES? Some experts say the NHI system does not do enough to educate the public, or pay doctors to talk to patients, about healthy lifestyles While the life expectancy of Taiwanese newborns in 2018 reached 80.69 years, the number of years people spent in poor health hit a record high at 8.41 years, Ministry of Health and Welfare statistics showed on Saturday. Healthy life expectancy is calculated by a person’s life expectancy minus the time they spend in ill health, such as the loss of mobility, disabilities and chronic disease, based on medical records and calculations about the years they live with disabilities. The number of years that Taiwanese spend in poor health is increasing slowly, but steadily, rising by 0.46 years, or five-and-a-half months, between 2012