"China's Wen pushes back against yuan rise calls - Sun, Mar 14, 2010 Reuters
BEIJING (Reuters) - Chinese Premier Wen Jiabao on Sunday spurned foreign calls for the yuan to rise and showed no let up in scolding the United States over recent bilateral tensions.
Wen said calls from the United States and other big economies for China to lift the value of its yuan currency were unhelpful, even protectionist, and vowed that Beijing will steer its own way on currency reform through a risk-filled economic landscape.
'We oppose mutual accusations between countries, and even using coercion to force a country to raise its exchange rate, because that's of no help to reforming the yuan exchange rate,' Wen told a two-hour news conference at the end of China's annual parliament meeting.
"We don't believe that yuan is undervalued." "
I admired Premier Wen. He is a much more gentler person than his predecessor, another person I admired greatly, Premier Zhu. Nevertheless, the resolve and firmness is the same despite the gentler tone of speech and delivery. His style is just as effective in stating the case for China and it does with the economy policies.
Lessons for me are:
1. He and his colleagues understand despite the rapid growth in China's economy in the worst of recessionary time in the last 2 years, the Yuan is NOT what the US and Euro and other envious countries made it out to be - overvalued! If you divide the foreign reserves and the export values with 1.4B people, the per capita is just nowhere near Japan when it too was pressured to appreciate its currency, Yen, 2 decades ago to great disastrous consequence! Japan's economy stagnated for 2 decades as its export become too expensive despite it buying 'cheap' US real estates and others and also diversified to 'cheaper' cost countries like the South East Asia, USA, etc;
2. He correctly stated that there are domestic worries brewing. The inflationary pressure building up locally due to deliberately loose credit policies and trillion of economic stimulus to vitalize GDP growth. The continued widening of the rich and poor gap. The complaints and even protests of ordinary people against rampant corruption and economic crimes by party cadres and high ranking officials among others. This is not the time to induce an export slump that is barely recovering as the biggest consumer market, USA, is still smarting for over-consuming. Consuming their future income on credit addiction!! Letting Yuan appreciates will not cut it!;
3. As a senior leader of an emerging nation, he merely expressed firmly the nation's stand against the mounting international pressure. He did it in a calm and collected manner. Manner befitting a great emerging nation and not just an emerging nation. Not too much indignation or crying fouls. Just stating the country's understanding and position. It is clear also that he knows China is the biggest holder of the US Treasury Bill. He knows who has the power. It is clear for all to see. There is no need to play that card yet! This is a leadership behavior that many need to learn - when you have the real power, there is no need to go around shouting and screaming that you have that power!!
May China continue to keep a steady course to fix the rampant corruption and close the widening rich-poor gap so that it can enjoy social stability upon which prosperity is built upon. International protests not withstanding.