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EU trade chief says pressure will not work on yuan revaluation

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EU trade chief says pressure will not work on yuan revaluation
2010-04-26 09:22:29 GMT2010-04-26 17:22:29 mg(Beijing Time) Xinhua English

by Xinhua writer Liu Xiaoyan

BRUSSELS, April 26 (Xinhua) -- As the United States is pushing China hard to appreciate its currency, the Chinese yuan, it may well find out that pressure will not work, the European Union (EU)'s top trade official has said.

The EU will discuss the revaluation of yuan with China, "but our idea is not to put pressure because we think it doesn't work," EU Trade Commissioner Karel De Gucht said in a recent interview with Xinhua.

De Gucht underlined that yuan appreciation alone will not bring about the necessary rebalancing of the Chinese economy.

"We consider that this is one element of a comprehensive strategy aiming at reducing rising domestic imbalances and at the same time rebalancing global growth," he said.

De Gucht is going to visit China next week with a high-level delegation led by European Commission President Jose Manuel Barroso.

On the forthcoming visit, the trade commissioner said that the delegation will discuss economic problems and the balancing of the economy of China and the whole world, because Europe and China have an important role to play.

"Europe, China and the the United States are all important economies, and so we have a shared responsibility to get a balanced world in economic terms," he said.

China is the second largest trade partner of the EU with the bloc's export to China increasing by 4 percent in 2009. The EU and China enjoy extensive trade relations, De Gucht said, noting there are also some problems.

"I think it's very important to have an overall discussion on where we go from here," he said, adding that the two sides "have a lot of interest in ensuring that our mutual foreign direct investments can reap the full benefits of our prosperous markets".

On a string of anti-dumping investigations the EU launched against China, he downplayed the size of the problem, saying this should not be exaggerated because only 1 percent of the bilateral trade is subject to dumping practices examination.

The EU initiated seven anti-dumping investigations against China in 2009 alone, said the Chinese Ministry of Commerce (MOC).

Despite strong opposition from China, the EU in December, 2009 decided to extend import duties on shoes from China and Vietnam by another 15 months.

MOC spokesman Yao Jian said that trade protectionism can only hurt mutual trust and lead to losses on both sides.

De Gucht said that protectionism from any side "is the last thing that we would welcome, given the economic situation."

"What we need is more free trade and more growth," he said.

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