The United States has incited Brazil and India to criticize China’s
currency policy, but Beijing need not worry too much because it can
defuse the tension through talks, a series of Chinese government
advisers told Reuters. Independent analysts warned, however, that a
belief that Brazil and India are doing Washington’s bidding and are not
truly aggrieved could make Beijing complacent and undermine fledgling
ties between the emerging powers. Increasingly widespread calls for a stronger yuan are awkward for
China, which is accustomed to facing U.S. pressure over its tightly
controlled exchange rate but has long tried to cast itself as the
natural ally of other developing nations. Brazil and India are
unlikely to be any more successful than the United States in persuading
Beijing to permit faster appreciation, researchers in Chinese government
think tanks said. “They must realize that the root of problem is
not China but the United States,” said Chen Fengying, director of the
World Economy Institute at the Institute of Contemporary International
Relations in Beijing. “Yes, we know India’s inflation is high and
Brazil is raising interest rates, but how can China’s currency policy
solve your problems?” Critics accuse Beijing of giving its
exporters an unfair advantage by keeping the yuan low, but the Chinese
advisers said that an ultra-loose U.S. monetary policy debasing the
dollar was to be blamed for rising currencies in developing nations. The
“BRIC” grouping of fast-growing emerging markets – Brazil, Russia,
India and China – would provide Beijing with an avenue for making its
case, the advisers told Reuters. “Complaints from other BRIC
countries add to the pressure over the yuan as they are key trading
partners and China has to take them seriously,” said Song Hong, a senior
researcher in the Institute of World Economics and Politics of the
Chinese Academy of Social Sciences. “However, China is unlikely to
change its ways because of the additional pressure. When the United
States pressed China, China explained itself to Washington, and China
can do the same with the BRIC countries,” he said. The BRICs, a
term coined by Goldman Sachs in 2001 to describe the growing influence
of large emerging economies, have been at the forefront in pushing for
more clout in international forums for developing nations. Despite
a shared interest in increasing their stature, the foursome have
struggled with gaping differences over climate and trade issues and have
yet to come up with clear proposals to advance a common agenda. The divisions have sharpened recently. Reserve Bank of India governor Duvvuri Subbarao said this week that an artificially low yuan hurt his country. And
Brazil’s newly elected President Dilma Rousseff, in part pressured by a
relentless rise in the real currency, has pointed to an undervalued
yuan as a threat, flooding her country with cheap Chinese imports and
eroding Brazil’s export competitiveness. “No matter if the
pressure is from developed countries or emerging markets, the Chinese
government is very unlikely to yield too much over the exchange rate
issue,” said He Maochun, an international studies professor at Tsinghua
University. For China, the smoking gun was U.S. Treasury Secretary
Timothy Geithner’s visit to Brazil this week, where he urged Ms.
Roussef to do more to lobby Beijing to let its currency rise. “The
United States incites emerging countries to besiege the yuan,” read the
top headline in the Chinese commerce ministry’s official newspaper on
Friday. “Although the situation facing China’s exchange rate is becoming more difficult, it will still be controllable,” it said. Zhou Zhiwei, a Latin American specialist in the Chinese Academy of Social Sciences, described it as a bump in the road. “Ties
between BRIC countries today are stronger than they were 10 years ago,
so it is normal to have friction and conflicts. That won’t affect
co-operation,” he said. The BRICs have held annual summits since
2009. With China scheduled to play host this year, the government
advisers said Beijing must remind the others of how its appetite for raw
materials and investment flows had propped up their growth. But
Gregory Chin, director of global development research at CIGI, a think
tank in Canada, said Beijing would need to offer something more concrete
to mend fences, particularly with Brazil, which it had been trying to
cultivate as a closer partner. Short of speeding up yuan
appreciation, China could try to make peace by offering Brazil more
trade financing and preferential access to the Chinese market, he said. “China
is going to have look more seriously at Brazilian interests. It is not
something that can be papered over so easily,” Mr. Chin said. The
yuan weakened against the dollar on Friday in an apparent expression of
Beijing’s displeasure over renewed U.S. pressure for faster
appreciation. It has risen about 3.5 per cent since China
unshackled it from its peg to the dollar last June, but it has been kept
little changed so far this year.
" CAD - Trade balance data rise in the month of December .."..
" notable increases were exports of machinery equipment, agricultural, fishing and forestry products".....
Canada's trade balance shifted into surplus in December as merchandise exports rose 9.7 per cent to $37.8-billion. Canada's
trade balance went to a surplus of $3-billion in December from a
deficit of $115-million in November, the first trade surplus since
February, 2010. Statistics Canada reports the export increase was
led by a 16.5 per cent gain in volumes of energy products, while overall
export volumes were up 6.6 per cent and prices rose 2.9. The agency says energy products accounted for over half the growth in
the value of exports, followed by industrial goods and materials, which
reached a record high. Notable increases were also recorded in
exports of machinery and equipment, agricultural and fishing products as
well as forestry products. The value of imports edged up 0.7 per cent to $34.8-billion as import prices rose 0.4 per cent and volumes increased 0.3. All
import sectors except other consumer goods posted gains in December;
the main sources of growth were energy products, agricultural and
fishing products, and automotive products. On the strength of
energy products, exports to the United States rose 10.8 per cent to
$26.7-billion, while imports were up 2.3 per cent. Canada's trade surplus with the United States increased to $5.1-billion in December from $3-billion in November. Exports to countries other than the United States increased 7.3 per cent, while imports declined 1.9. Canada's
trade deficit with countries other than the United States declined to
$2.1-billion in December from $3.1-billion in November.
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