Cyrillic Partners

French President Nicolas Sarkozy went to China and complained about the Government’s strangle-hold on the Yuan and begged the government to let the currency appreciate against the Euro. Reuters has the story.

Keeping the yuan low makes it easier for Chinese businesses to export their goods. Other countries, especially the U.S., are complaining that China’s currency policy is giving its exporters an unfair advantage over domestic suppliers.

Henry Paulson, secretary of the U.S. Treasury, made similar statements earlier this month. He said China needs to loosen its choke-hold on its currency and let it adjust to market prices and appreciate faster. The secretary said China was “out of step,” with the rest of the world’s perception of what it needs to do with its currency. (Read our story about his statements here.)

Some pundits have opined that the U.S. is attempting to replicate China’s protectionist currency policy–devaluing the dollar to stimulate exports and domestic production. I wouldn’t bet on that actually happening however.

[Image from FoxNews.com]

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