China Manipulates, Europe Wins

Tim Geithner, the newly confirmed U.S. Treasury Secretary, ruffled feathers in Beijing and raised eyebrows across the Atlantic with a statement at his confirmation hearing that China has been "manipulating" its currency to gain an unfair advantage in export markets. Geithner's comments were received with predictable hostility in Beijing, but more interesting was the lukewarm response from across the Atlantic--given the European Union's own large current account deficit with China.

A spokesperson for the EU's monetary and economic affairs commissioner simply commented that "exchange rates should reflect economic fundamentals. That's all we wish to say." In other words, despite tough talk on China last year, the EU prefers not to touch this one.

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Posted by Lauren Keane on February 6, 2009 5:41 PM

Europe's China Problem

Europe, like the United States, has a China problem. But the problem is not what most analysts suggest. Four months ago European trade officials were fulminating about Europe's growing trade deficit with China. This week, with the Chinese economic ministry reporting a dramatic slowdown in the Asian giant's growth and G-20 countries meeting to try to chart a new course for the global economy, Europeans have begun to ask a different question: "What effect would a serious deceleration in China have on the Old World?"

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Posted by Lauren Keane on November 13, 2008 12:14 PM