"I am deeply concerned about recent exchange rate developments," said Jurgen Thumann, president of Business Europe, the pan-EU lobby. "An overvalued euro is not good news for growth and is inconsistent with the commitments of the G20 countries for an orderly resolution of global imbalances. We must insist that our partners honor their commitments."
China has held the yuan fixed to the dollar despite its huge trade surplus through vast purchases of foreign bonds. This has allowed it to flood Europe with cheap exports, gaining market share on the coat-tails of dollar devaluation. Mr Thumann called on EU leaders to "push the message" in Beijing that China must let the yuan rise. China's central bank governor, Zhou Xiaochuan, let slip at the G20 summit that global pressure for yuan appreciation "is not that big".
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