Germany, the largest exporter in Europe, has kept the pressure on China to let its yuan appreciate more fairly, in line with those of trading partners. It warned that a currency war could ensue if countries continue to try and help their exports by keeping their currency values low.
Rainer Bruederle, Economic Minister for Germany has said that the onus is on China to prevent trade disputes "We have to take care that the currency war doesn't become a trade war," Bruederle said to the German paper the Handelsblatt daily. "China bears a lot of responsibility for ensuring that it doesn't come to an escalation.”
Bruederle is currently in China and is representing Germany at the G20 meeting of ministers and governors of central banks in South Korea next week. After the pressure was put on China at the recent EU-Asia summit, this is likely to be the next venue for pressuring China over imbalances in currency which are perceived to distort trade.
The IMF meeting in Washington last weekend was also turned into a forum for complaining about currency depreciated. There was no consensus reached on how to counter the problem, and China remains steadfast in its will not to alter its currency policy.
While China has been singles out over currency depreciation practices, Thailand, Australia, Japan and Brazil, among others, have also moved to intervene in the economy in order to bring down the value of their currencies.
Germany joins the US in protesting that China’s yuan policy is cultivating unfair trade practices by not letting the yuan appreciate.
