BUSINESS

French foreign minister says he will tell Chinese that their currency in undervalued

09/11/2011 05:37 EDT | Updated 11/11/2011 05:12 EST
CANBERRA, Australia - French Foreign Minister Alain Juppe said on Sunday that he will discuss China's need to increase the value of its currency when he visits Beijing this week.

"We have as an objective that China's position evolve in a certain number of areas, in particular in terms of currency," Juppe told reporters through an interpreter during a visit to the Australian capital Canberra.

"We believe that the yuan is undervalued at present. We will certainly discuss this with the Chinese," he added.

Beijing is under pressure from Washington and other trading partners to ease currency controls and other measures that they complain keep the yuan undervalued and swell China's trade surplus.

Juppe will visit Beijing on Wednesday for talks ahead of a summit of the Group of 20 rich and developing nations in the French coastal resort of Cannes in November. The summit will discuss the global economic crisis and high levels of sovereign debt owed to China.

Asked if he expected that China would accelerate efforts in appreciate the yuan, Juppe replied: "We hope so."

"This system that we have in place at the moment is not in the long term a sustainable system, and one of the main issues that will be discussed at the G20 meeting is how we can rebalance this system worldwide," Juppe said.

China's trade growth accelerated in August despite weakening global demand and its politically sensitive trade surplus narrowed from a more than two-year high.

Export growth for the world's second-largest economy grew to 24.5 per cent from July's 20.4 per cent, while imports surged to 30.2 per cent, up from July's 22.9 per cent, customs data showed Saturday.

The unexpectedly strong import growth shows that Chinese demand remained robust in August despite government efforts to steer economic growth to a more sustainable level.