Wednesday, October 26, 2011

China again says it won't be pressured

The Chinese government late Tuesday (US EDT) refused once again to raise the value of its currency -- the yuan.

The Wall Street Journal reports that its decision is sure to ruffle feathers in the U.S.
Political pressure on China from abroad to allow faster yuan appreciation is unlikely to abate in the near future. A U.S. Senate bill that would penalize China for its currency policies may be stalled in the House of Representatives, but the U.S. presidential elections in November 2012 are likely to keep the issue in the headlines for at least the next year, with Republican presidential hopeful Mitt Romney already pledging to declare China a currency manipulator.
Attempting to cut through the political bluster, the former U.S. treasury secretary Henry Paulson suggests in this editorial appearing on the BBC's Web site that the U.S. and China must work together to ensure that economic growth is possible around the world. 
Beijing and Washington do not always need to work jointly. But they do need to take steps - mostly individually, sometimes together - that will support and sustain economic growth.
And to do that, Washington and Beijing will need a new framework to guide their economic relations. Neither country can address today's dynamic and considerable economic challenges with the policies they have currently.
Meanwhile, the Financial Times reports that China will increase its investment in Europe

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