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Brüderle warns of trade war on China visit

The Local · 12 Oct 2010, 08:06

Published: 12 Oct 2010 08:06 GMT+02:00

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"The danger of a trade war has appeared on the horizon," Brüderle told reporters travelling with him on his two-day trip to China, which was to include stops in Beijing and Shanghai.

"The danger is that complaints about currency undervaluing lead to retaliatory measures, which could eventually turn into a trade war," the minister said, without naming a specific country.

Beijing has come under increasing pressure from its trading partners in the United States and Europe to allow the yuan to appreciate at a faster pace. Critics say the unit could be undervalued by as much as 40 percent.

The US House of Representatives last month passed a bill that would expand the Commerce Department's powers to slap tariffs on China for currency manipulation, rather than just outright subsidies.

The legislation must still go through the Senate and eventually be signed by President Barack Obama in order to pass into law.

The spectre of a global currency war dominated the annual meeting of the International Monetary Fund in Washington over the weekend, but no agreements were reached.

"We must not allow the situation to get out of hand, or turn our backs on free trade," Brüderle said, adding that he saw himself as an "ambassador, perhaps even a missionary, for the fight against protectionism."

Story continues below…

Brüderle will replace ailing German Finance Minister Wolfgang Schäuble at upcoming Group of 20 meetings in South Korea, where he said he hoped the world's major economies would come up with "reasonable solutions."

After his stop in China, which will include meetings with key officials in Beijing and a stop at the World Expo in Shanghai, Brüderle will head to Japan.


The Local (news@thelocal.de)

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Your comments about this article

22:54 October 12, 2010 by Logic Guy
Well, all of this is indicative of the problems associated with being "too integrated" with foreign countries.

Sure, imports are nice, however, it's imperative that a nation focus primarily upon their own way of life.

With all of the so-called intellectuals in decisions-making positions, you would think that at least a few of them would know that they must protect their nation from the immorality of others.

Look at the EU? Why are there so many problems? The answer is actually simple. There are several, different ideologies trying to function as one, but without a "Common Law."

Without some form of structure that prevents misguided financial practices, huge problems will be waiting down the road.
00:47 October 13, 2010 by Prufrock2010
I hope the EU will do something about it because it's a dead bang certainty that the Republicans in the US Senate won't. China's currency manipulation is giving it unprecedented global power, enabled by short-sighted Western consumers with an insatiable appetite for cheap goods. Somebody had better step up to the plate before the so-called Beijing Consensus is the dominant economic and political force on the planet.
02:50 October 13, 2010 by wenddiver
Don't buy anything from Communist China. Problem solved. Let the stores and politicians know what you are doing. Thailand, South Korea, Mexico and other places can make our imported goods, the only reason China has a monopoly is our politicians who borrow money from her, so they can bypass the will of the American people. Repudiate all debt to China that was not voted on by the American People. Encourage all Western countries to do the same.
14:17 October 13, 2010 by William Thirteen
yes, i encourage the US to default on its international debts as well! It will put its financial industry on the same firm footing as its public health and education sectors.
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