Eurozone Crisis And Its Impact

The eurozone crisis has so far had a limited effect on China and the world economy but its negative impact is set to grow as the problem will last, Chinese Commerce Minister Chen Deming said to Business Spectator this week. Mr Chen noted that the eurozone debt problem “currently has a rather small impact on consumer spending … so there is not much impact on our trade”.

However, the trade minister said that “there is still a maturing period” before the crisis will be brought under control.”So, my feeling is that the future impact of this crisis for the world and for Chinese trade will expand,” he added.

However, he expressed confidence that Europe could control the crisis and eliminate it gradually. “But at the same time, we believe that this will be a long process. There will be an impact on the world economy,” he said.

Responding to criticisms that China was keeping its currency artificially low to boost its exports and calls for it to allow the yuan (renminbi) to appreciate, Mr Chen said that such demands only served to “cause major difficulties.” “When people talk about an appreciation of the renminbi, we see large capital inflows, causing major difficulties for us,” he said.

Rather, he believed that from a trade perspective, “the recent renminbi exchange rate has reached a reasonable level, in a reasonable range. “China’s greatest gift to Cannes summit is that we have maintained 9.0 percent (growth) and trade reaching three trillion dollars,” Mr Chen said.

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