PPE

US claims that China’s export of shoes and clothing products causes economic imbalance

when some US Congressmen, officials and scholars clamour to put pressure on China to force the appreciation of RMB, different voices are heard from Europe, China’s neighboring Japan and South Korea, as well as Latin America and Australia, which export raw materials to China. This is quite different from the scene of forcing the yen to appreciate in those years, which reflects that the status of economic relations in international relations is no longer comparable

claiming that China’s exports lead to global economic imbalance is one of the main means for the United States to force RMB appreciation. According to this argument, the United States believes that the global economy can be “rebalanced” by restraining China’s exports through RMB appreciation. The real purpose of this theory created by the United States is to attract relevant countries to jointly pressure the appreciation of RMB< However, judging from the actual positions of various countries, the United States has not drawn any "allies". This is quite different from the situation when Japan was forced to sign the Plaza Agreement no response from the United States as China’s largest trading partner, the European Union is obviously the number one goal of the United States, but the European Union has clearly stated that it does not intend to raise the issue of RMB exchange rate to the political level. Karel de Gucht, the EU trade commissioner, said that during his visit to China in April, he planned to discuss with the Chinese government on several factors affecting trade, from shoes to foreign investment, and the value of the RMB was just one of them” At the moment, the problem is not political in Europe, “explains de Gucht Germany, the core country of the European Union, has also made a similar statement. German economy minister Rainer Bruederle said on the 23rd that he hopes China can realize the free floating of the RMB exchange rate, but it is not easy for China to do so, which Germany “fully understands” even the United States’ consistent ally, the United Kingdom, did not keep up with the United States this time. British Foreign Secretary Miliband told the media on the 23rd: “on the issue of RMB valuation, the British government has not taken a position.” compared with the vague attitude of European countries that neither want to offend the United States nor offend China, the attitude of China’s neighboring countries is more clear when meeting with Chinese officials, deputy governor of the Central Bank of the Russian Federation Dmitry Melnikov stressed that Russia firmly supports China’s RMB exchange rate policy< Yoshihihiko Noda, Japan's finance minister, said sanctions aimed at forcing China to allow the renminbi to appreciate were "undesirable," the Financial Times reported on the 25th the attitude of South Korea is slightly different. South Korea’s “Central Daily” said on the 16th that if South Korea holds the idea of “standing idly by and enjoying its success” in the Sino US exchange rate dispute, it means that South Korea has not got rid of “the nature of a small country” and “no future for a big country”. 1t should strive to use the “Seoul consensus” to solve the Sino US exchange rate dispute, but not unilaterally oppress China. However, park Chul Hwan, an official of South Korea’s National Federation of economic men (FK1), broke the real calculation that determined South Korea’s attitude: “if the RMB appreciation, it should weaken the price competitiveness of Chinese products. 1n principle, this should be good news for South Korea. But in fact, it depends on how many South Korean enterprises have factories in China and how much of their output in China is used for exports. “ and the Financial Times analysis show that China and Japan have built considerable manufacturing capacity in Chinese mainland, which means they are taking a share from China’s export boom. Therefore, they prefer to keep the RMB exchange rate stable however, China’s importing countries are not willing to see the appreciation of RMB at all, because it will mean that their exports will decrease. Reuters reported on the 24th the attitude of Latin American countries towards the RMB exchange rate. The article said that at the meeting of the 1nter American Development Bank held in Mexico, there were different views on the sensitive issue of RMB, or they simply avoided it, even though the United States is planning to take a more radical position. According to the article, a Canadian representative said his country had “views” on exchange rate manipulation, and his assistants huddled together to highlight the complexity of the issue to reporters. But officials from countries that export commodities to China, such as Peru, the world’s second-largest copper producer, downplay this. Peruvian finance minister Alaus said, “to a large extent, our policies are coordinated with Asia, especially China. China is a very important business partner, and we must strive to reduce the exchange rate risk.” Europe will not put pressure on RMB why does the United States become a “loner” on the issue of RMB exchange rate, and even fail to get the response of the traditional ally EU Li Xiaoning, a famous strategist and special researcher of China Economic System Reform Research Association, said: “there are two major changes in the current pattern of international relations. One is that the territory of alliance relations has changed, and ideology is no longer an important basis for dividing camps; Second, the principle of alliance has changed. National security is no longer the only “primary topic”, and the importance of economic relations has risen to at least as important as security. “ $$$$ one of the main reasons why the European Union is unwilling to join the US led alliance to force RMB appreciation is that the RMB is already appreciating against the euro, so there is no need to force it. Since the RMB is pegged to the US dollar, the exchange rate of the euro against the US dollar has been declining since the end of 2009, and the appreciation trend of the RMB against the euro has basically kept pace with the US dollar. From December 2009 to now, the accumulated appreciation rate of RMB against the euro has exceeded 12%< 1n fact, the trend of RMB appreciation against the euro has had a significant impact. While China's imports fell 11.2% year on year in 2009, EU exports to China increased by 4%. From January to February this year, China's exports grew by 31.4%, while its imports grew by 63.6%. The growth rate of imports was significantly higher than that of exports. Among them, China's exports to Germany, the core country of the European Union, increased by 34.4% from January to February this year, but its imports from Germany increased by 39.9% according to the official statistics of the European Commission, in 2009, the EU’s total exports were 1.093 trillion euros, imports were 1.199 trillion euros, and the trade deficit was 105.476 billion euros. Compared with the US $380.7 billion deficit, it is not “terrible”. Therefore, Europe has no incentive to follow the US and force RMB appreciation from the perspective of EU’s main import and export commodities, the most important export commodities of EU are machinery (490 billion euro in 2008), chemical industry (129 billion euro in 2008), automobile (110 billion euro in 2008), pharmacy (69.7 billion euro in 2008) and civil aircraft (45.7 billion euro in 2008), which together account for more than 80% of EU’s total exports, And the single statistics all maintain a high surplus. Among the EU’s major import and export commodities, the only item with a huge deficit is textiles and footwear, with a deficit of 44.2 billion euro in 2008 from the data, it is not difficult to find that the main export products of Europe are products that Europe has advantages but China has no advantages. 1n these aspects, China and Europe have strong complementarity. Even if the RMB further appreciates, the trade situation with Europe will not change much. And even for the textile and footwear projects with huge deficit in Europe, the cause of the deficit is well known: a large part of European famous brand clothing and shoes are processed and manufactured in China, but they are only sold back to Europe and included in European imports. 1f the RMB appreciation, in fact, the result will not be less “Chinese goods”, but the “local” clothing prices in Europe appreciation is unfavourable to Europe, Japan and South Korea Niall Ferguson, an economic historian at Harvard University, invented the term “Chimerica” to describe Sino US economic relations: China’s desperate production and the United States’ desperate consumption lead to China’s huge trade surplus and the United States’ huge trade deficit. 1n order to produce, China has to import a large amount of raw materials from the world, while the United States has to borrow money from the world in order to consume. Thus, a global industrial and economic cycle with China as the center and a global financial cycle with the United States as the center are formed. The two “cycles” form the core of the global economic system although Europe is the center of the traditional international relations system, it has been largely marginalized in the contemporary global economic system. 1n 2009, the total import and export volume of EU was only 20.9% of GDP, of which the export volume was 9.97% of GDP. 1n fact, this shows that the degree of EU’s “self integration” is far greater than that of its “globalization”< However, high-tech products account for the majority of the EU's exports, which do not account for a large proportion of the total economy. Li Xiaoning told reporters that the EU is China's largest technology supplier in total. The biggest difference between EU China economic relations and US China economic relations is that the United States regards China more as a "factory" and "market" and is only willing to trade products with China, while Europe regards China more as a cooperative partner, transfers a lot of technology to China, and then cooperates to produce products. Mobile phone is a typical case. Europe imports a large number of mobile phones from China, but in fact its brands, such as Nokia, are all made in China. Nokia established its R & D center in China as early as the 1980s, transferring its core technology to China. 1n contrast, the United States will not hand over the core technology of iPhone to China. 1n this situation, what Europe wants is a stable exchange rate between RMB and euro similar to the situation in Europe, Japan and South Korea have also established a large number of production lines in China. 1n fact, part of China’s exports is to help Japan and South Korea export. Therefore, Japan and South Korea are not willing to join the “Lianheng” of RMB appreciation in the United States for Latin American countries and Australia that export raw materials to China, most of their imports do not come from China, but from the United States and Europe. For them, the appreciation of RMB will mean a decline in their exports to China, which will further hit their economy in the financial crisis

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