Yuan’s undervaluation to figure at G-7 meet
03 Feb 2010
With China recording scorching growth and advanced nations registering meagre or zero growth, the communist nation's hugely undervalued currency, the yuan, is due to come up for discussion at this week's Group of Seven (G-7) meet of finance ministers and central bankers.
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| 100 Yuan, 2005 |
The G-7 meet will take place on 5-6 February at Iqaluit, a remote community located close to the arctic tundra in Canada. Along with Japan, the G-7 includes the US, Germany, France, the UK, Italy and Canada.
''It's possible that the yuan will be one of the agenda items,'' Japanese finance minister Naoto Kan said at a news conference in Tokyo. He took pains to clarify, however, that should the currency come up for discussion he would discuss it ''...on the understanding that stable growth in China is desirable for Japan.''
For long, countries have complained that the undervalued currency gives China an unfair export advantage. Tokyo would prefer a less manipulated yuan but is wary of taking on China, as it could affect its economy.
China is already Japan's largest trading partner and Tokyo relies heavily on exports to this communist nation, along with other fast-growing Asian nations, to keep its economy on an even keel. Not unlike China, exports too are a key driver of Japan's economy.
