CHINA: New British finance minister George Osborne says China's currency should be looked at as part of global imbalances

Record ID: 191029

  • Title: CHINA: New British finance minister George Osborne says China's currency should be looked at as part of global imbalances
  • Date: 4th June 2010
  • Summary: BEIJING, CHINA (JUNE 3, 2010) (REUTERS) MOTORCADE DRIVING THROUGH GATE OF BRITISH AMBASSADOR'S RESIDENCE IN BEIJING UNION JACK FLAG FLYING ON CAR BRITAIN'S CHANCELLOR OF THE EXCHEQUER GEORGE OSBORNE WALKING UP STEPS MEN WALKING DOWN STEPS OSBORNE WALKING ACROSS GRASS (SOUNDBITE) (English) BRITAIN'S CHANCELLOR OF THE EXCHEQUER GEORGE OSBORNE SAYING: "Well, I think the currency issues should be set in a broader framework of global imbalances, which I think should be attributed to the crisis that the world went through in the past couple of years and are very important for global growth going forward. So I don't think the currency can be separate from a bigger discussion about how deficit countries do their part to reduce their deficits and live within their means, and countries like China do their part to support global growth." OSBORNE SPEAKING TO JOURNALISTS (SOUNDBITE) (English) BRITAIN'S CHANCELLOR OF THE EXCHEQUER GEORGE OSBORNE SAYING: "The fact that, as the new chancellor, the first official overseas visit I've done is to China I think is also a sign of how seriously we take improving the economic ties between our two countries. And of course it's very important that British companies and British products have free access to Chinese markets and I actually think that China and Britain can be allies in making a broader argument in the world against protectionism and for free trade, because both our economies benefit when that happens." OSBORNE'S FACE (SOUNDBITE) (English) BRITAIN'S CHANCELLOR OF THE EXCHEQUER GEORGE OSBORNE SAYING: "Of course I'm concerned about instability in the Euro zone, I mean, it's an incredibly important trading partner for Britain, it's incredibly important that the instability there doesn't spread elsewhere. They have got on with providing some reassurance that liquidity is going to be sorted through the stabilization fund that they've created. I think individual countries like Greece, like Spain, like Portugal now need to get on and show that they can deliver on their promises on the deficits in those countries. When it comes to Britain, look, what we need to do is also show we can tackle our deficits." OSBORNE WALKING ACROSS GRASS OSBORNE WALKING UP STAIRS OSBORNE GETTING INTO CAR MOTORCADE DRIVING AWAY CARS PASSING IN FRONT OF GATE OF BRITISH AMBASSADOR'S RESIDENCE GUARDS STANDING OUTSIDE BRITISH AMBASSADOR'S RESIDENCE SIGN READING 'RESIDENCE OF THE BRITISH AMBASSADOR'
  • Embargoed: 19th June 2010 13:00
  • Keywords:
  • Location: China
  • Country: China
  • Topics: International Relations,Finance
  • Reuters ID: LVAEQCB4X7I7DJRGLOIKKZM6PVY3
  • Story Text: China's yuan currency should be looked at as part of global imbalances which will be discussed at the imminent G20 meeting in South Korea, Britain's new chancellor George Osborne said on Thursday (June 3) on his arrival in the Chinese capital Beijing.
    China came under renewed pressure to let the yuan appreciate on Wednesday (June 2) when a letter obtained by Reuters showed the United States government was considering investigating whether its strict currency policy created an illegal trade subsidy.
    The Asian powerhouse has said it is committed to currency reform, but at its own pace.
    "Well, I think the currency issues should be set in a broader framework of global imbalances, which I think should be attributed to the crisis that the world went through in the past couple of years and are very important for global growth going forward. So I don't think the currency can be separate from a bigger discussion about how deficit countries do their part to reduce their deficits and live within their means, and countries like China do their part to support global growth," Osborne told reporters.
    Osborne's comments are his first on the explosive topic since the Conservative-Liberal Democrat coalition took office on May 11.
    Western nations, eager to rebalance their economies following the financial crisis, argue China's foreign exchange policy gives it an unfair advantage in global trade. Economists believe the yuan could be undervalued by as much as 40 percent.
    Osborne, visiting Beijing ahead of a June 4-5 G20 meeting of finance ministers and central bankers in the Korean city of Busan, said his trip showed the importance Britain places in its business relations with China.
    "The fact that, as the new chancellor, the first official overseas visit I've done is to China I think is also a sign of how seriously we take improving the economic ties between our two countries. And of course it's very important that British companies and British products have free access to Chinese markets and I actually think that China and Britain can be allies in making a broader argument in the world against protectionism and for free trade, because both our economies benefit when that happens," he said.
    Osborne, a deficit hawk, said China had raised their concerns about the Euro zone fiscal crisis with him during meetings.
    Across Europe, policymakers are tussling with how to bring down bloated government borrowing without harming economic recovery after the global downturn and Osborne said that questions remained over whether heavily-indebted countries would be able to push through the scale of fiscal tightening required.
    "Of course I'm concerned about instability in the Euro zone. I mean, it's an incredibly important trading partner for Britain, it's incredibly important that the instability there doesn't spread elsewhere. They have got on with providing some reassurance that liquidity in going to be sorted through the stabilization fund that they've created. I think individual countries like Greece, like Spain, like Portugal now need to get on and show that they can deliver on their promises on the deficits in those countries. When it comes to Britain, look, what we need to do is also show we can tackle our deficits," he said.
    Eager to introduce some form of bank levy perhaps as soon as his first budget on June 22, Osborne said he wanted swift, co-ordinated action from the G20 on financial reform.
    Earlier on Thursday, Osborne met with China's Vice-Premier Wang Qishan, followed by Liu Mingkang, Chairman of China's Banking Regulatory Commission.
    He was due to fly to Shanghai later on Thursday for events including a visit to the U.K. Pavilion at the World Expo on Friday (June 4).
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