EU-China Summit Collapses over Yuan Dispute

en Jiabao the Prime Minister of People's Republic of China and European Commission President Jose Manuel Barroso (R) at the start of an EU China High level cultural forum. EPA/BGNES

The US-China dispute over the appreciation of the Chinese yuan has arrived on European soil practically ruining the EU-China summit in Brussels on Wednesday.

The summit ended with a canceled press conference that EU leaders Jose Manuel Barroso and Herman Van Rompuy were supposed to give together with PRC Prime Minister Wen Jiabao.

"I say to Europe's leaders - don't join the chorus pressing [China] to revalue the yuan. Many of our exporting companies would have to close down, migrant workers would have to return to their villages. If China saw social and economic turbulence, then it would be a disaster for the world," Chinese Premier Wen Jiabao told a business forum taking place in the margins of the political summit in Brussels, as cited by EU Observer.

Not unlike the concerns in the USA, in Europe, Eurogroup President Jean Claude-Juncker has argued that China's undervaluation of the yuan might affect negatively the economic recovery of the euro zone.

The EU has also demanded improved access for European companies to the Chinese market as well as progress on upholding human rights.

While the heads of the EC and the European Council have backed China's request for greater voting weight in the IMF, they have made demanded "enhanced responsibilities in global governance" in return.

Even though the joint press conference after the summer was said to have been canceled because for scheduling reasons, the differences between the Europeans and the Chinese are reported to have been the actual cause for that.

"As in any true partnership, the EU and China have commonalities but also differences of approach. This should not impede our joint will to bring the relationship to a higher level. We should be ambitious and make sincere efforts to achieve progress on key issues of mutual concern," said the communique of the EC and European Council heads Barroso and Van Rompuy after the EU-China Summit.

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