China defends trade policy

On March the tenth, the prime minister of China – Wen Jiabao – addressed the political and economical concerns of Western nations during the National People’s Congress (NPC). The NPC is the only time a year on which the prime minister of China holds an open press conference, and that’s why it’s so highly anticipated in the rest of the world. Wen made several promises during his speech, amongst others; more cooperation between nations to bolster the global economical recovery, an increase of the educational budget, more low-cost housing and a consistent striving for a better living standard for all Chinese citizens.

Wen also defended his government against certain allegations - for example: that China is intentionally undervaluing the yuan in order to boost exports. Wen countered this by lashing out at the United States – who expressed their concerns with the Chinese currency – by asking Washington to take unspecified steps to reassure Chinese investors - who have over $800 billion in foreign exchange reserves in U.S. Treasury Securities.

As for geopolitical issues; China stands firm in their beliefs that Tibet and Taiwan are Chinese property and refutes sabotaging the negotiations at the Copenhagen Climate Summit (CCS), stating that they were never formally invited to any negotations.

It’s another amazing example of the struggle between China and the U.S. Both countries are trying to dominate each other and keep throwing threats and accusations in all directions. The bickering over their currencies is a prime piece of evidence in this complex case. China is a master in saying one thing and doing another; for example: “China urges countries to resist protectionism and asks them not to take advantage of each other during this fragile economic recovery”. While they’re the first ones to take advantage of the recent economic downturn by lending out credit with insane interest rates and to use their surpluses of previous years in order to keep their production at the same level it was before the downturn.

On the other hand we have the United States challenging the yuan, probably in order to safeguard their own economical interests . If the yuan is positively revaluated it would mean lower export numbers for China, which directly benefits the United states. This is an understandable argument, if it weren’t for the weak dollar and the gigantic government debt.

It goes to show that while both countries preach cooperation and understanding, all they really care about is fortifying their grip on the world’s political and economical stage. And all these charades and white lies are holding back the real economic recovery.

Simon Verduyn

http://www.huffingtonpost.com/2010/03/14/china-defends-trade-polic_n_498324.html