East Asia stands firm: China refuses to discuss currency issues

14 October 2014

Source: New Europe (Belgium)
Source type: Magazine
Published on: 10 Oct 2010

Posted on: 11 Oct 2010

Oh, East is East, and West is West, and never the twain shall meet,
Till Earth and Sky stand presently at God's great Judgment Seat;
But there is neither East nor West, Border, nor Breed, nor Birth,
When two strong men stand face to face,
tho' they come from the ends of the earth!

Rudyard Kipling, the British poet of empire, would be impressed by the number of times East and West met in Brussels last week. However, in the meetings between the two continents, it was Europe who looked the less impressive.

Economics dominated the discussions, but the post Lisbon EU appeared unimpressive, compared to the economic and political might of China, who remained polite, but unmoved by requests to revalue their currency. Chinese Premier Wen Jiabao told the EU leaders to, "Do not work to pressurise us on the renminbi rate." and assured them that they were going ahead with reforms.

He added that should there be a sudden rise in the currency, "Many of our exporting companies would have to close down, migrant workers would have to return to their villages." He reminded the EU of the global consequences, adding, "If China saw social and economic turbulence, then it would be a disaster for the world."

There was some movement on broader EU Asia issues, when Australia, New Zealand and Russia became members of ASEM. Russian Foreign Minister Sergei Lavrov said that their membership was a sign that globalization meant, "our interdependence is growing steadily."

There was unity on some issues, notably on North Korea’s nuclear arsenal, when ASEM urged the DPRK to, "abandon all nuclear weapons and existing nuclear programs in a complete, verifiable and irreversible manner."

There were big changes planned for the International Monetary Fund and World Bank. ASEM delegates won a change in the membership of the IMF, issuing a statement that declared, "shifted to dynamic emerging markets and developing countries by at least 5% from overrepresented to underrepresented countries using the current quota formula as the basis to work from, while protecting the voting power of the poorest countries."

In addition, they also said that there had to be, "an open, transparent and merit-based process for the appointment of heads and senior leadership of international institutions" and more representation of Asian nations in middle management positions and the Executive Board.

They also pushed for a redistribution of voting power in the World Bank, praising the Bank's Development Committee's decision to readjust votes to reflect the change in economic power and urged the Board of Governors to approve the move.

There was a significant development when Trade Commissioner Karel De Gucht, signed a Free Trade Agreement (FTA) between the EU and South Korea. This is the first FTA with Asia.

"It will provide a real boost to jobs and growth in Europe at this critical time. This wide-ranging and innovative deal is a benchmark for what we want to achieve in other trade agreements", said Commissioner De Gucht. "Tackling the more difficult non-tariff barriers to international commerce can cut the costs of doing business as much if not more than getting rid of import duties."

Although the series of meetings and summits went with little controversy, there is little doubt that the financial crisis has diminished Europe’s influence.