Briefings - 1069. page

Xinhua published an editorial on international affairs addressing yuan appreciation. It stated that trade deficits that some countries have with China are caused by their domestic structural and policy factors, not the exchange rate with China. The editorial questioned the magnitude of the reported trade deficits, suggesting the increase in Chinese exports may be attributed to the foreign companies in China exporting back to their own home countries.

“From whatever angle, to pressure a substantial appreciation of the yuan within a short time is unwarranted, unfounded and even, it is more useless. Some Western politicians have tirelessly speculated a ‘yuan appreciation’ theory. Its underlying motive is questionable. The financial crisis has brought people to see that the current world economic imbalance is mainly attributed to excess consumption in some developed countries, and to the economic contraction. To pressure for yuan appreciation does not help resolve these issues. In fact, it is developed countries that should make positive policy adjustments to reform their economic structure in order to fulfill their international responsibilities.”

Source: Xinhua, March 18, 2010
http://news.xinhuanet.com/world/2010-03/18/content_13197957.htm

China and the U.S. are more foes than friends, says Yan Xuetong, a Chinese international relations scholar. In an interview with the State’s International Herald Leader, Yan stated that while the two do share some economic interests, they have much greater conflicting strategic interests in term of security. While the U.S. continues to support the Dalai Lama, Taiwan independence and East Turkistan independence, China will not allow these groups to succeed. Thus, on the political front, conflicts dominate the Sino-US relationship with few common interests. He expressed that cooperation does not mean China and the U.S. are friends and that the two will continue to pretend to be friends during the Obama administration.

Yan received his Ph.D. in political science from the University of California, Berkeley in 1992.

Source: Xinhua, March 22, 2010
http://news.xinhuanet.com/herald/2010-03/22/content_13221096.htm

The Global Times published an article by a professor from the National Defense University titled, “Currency Exchange Rate Fight Is an Informational War.” The author argued that the U.S. pressure on China to appreciate the Renminbi is an information war with China in a broader sense. U.S. war tactics include information control and system integration. Its goal is to devalue the US dollar so as to pay less to China. The U.S. has set and controlled the tone of the information. It also tries to enlist allies to jointly fight China. China needs to improve its informational war capability by disclosing more true information on the Renminbi exchange rate and increasing China’s “speaking power” with international society.

The author also pointed out that every 1% appreciation of the Renminbi eats 1% of the profit for Chinese companies. Since Chinese export factories live on the average on a 3-5% profit margin, the currency exchange rate battle is critical to China’s economy.

Source: Global Times, March 23, 2010
http://opinion.huanqiu.com/roll/2010-03/753215.html