EU leaders disappointed with China meeting
Updated
European leaders meeting with their Chinese counterparts in Nanjing have come away disappointed on the issues of climate change and the currency. China's Premier Wen Jiabao easily fended off calls for a weaker yuan and stronger action on climate change.
Presenter: Karon Snowdon
Speakers: Yang Ailun, Climate Change Campaign Manager for Greenpeace China; Ben Simpfendorfer, Chief China Economist, Royal Bank of Scotland
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SNOWDON: The criticism was pointed and the response was just as sharp. China should be providing more leadership and take more responsibility on climate change, according to Swedish Prime Minister Fredrik Reinfeldt, speaking in his capacity in China as EU President. Chinese Premier Wen Jiabao wasn't about to let that pass. He said China was making a major contribution to the global climate change effort. It had pledged last week to slow its growth in greenhouse gas emissions by 40 to 45 per cent by 2020. But although the announcement drew some praise, Greenpeace says the urgency of climate change means China should be doing more. Yang Ailun is the Energy and Climate Change campaign manager for Greenpeace China.
YANG: I think China does play a very important role, it is the biggest emitter and it also is the biggest developing country, so I do hope that during the Copenhagen meeting China would show more leadership.
SNOWDON: China's already announced that it will cut its carbon intensity by between 40 and 45 per cent by 2020 from its 2005 levels. That's more than many people expected.
YANG: That's not more than what Greenpeace expects. I think it is a very positive step made by the Chinese government just 10 days before Copenhagen, however if you look at the range I think that China should and could do more.
SNOWDON: Climate wasn't the only message at the EU China Summit. As the biggest market for China's exports, the European Union is feeling the pain of the relatively low level of the Chinese currency, the yuan. Pegged at about 6.8 yuan to the US dollar, it gives China's exporters an advantage internationally and creates a big trade surplus in China's favour. Premier Wen Jiabao was even more direct when he called the criticism unfair and accused some countries of applying new trade protection measures against China. Ben Simpfendorfer, the Chief China economist with the Royal Bank of Scotland, however, says the Europeans have a case.
SIMPFENDORFER: The Chinese yuan depreciated quite markedly against the Euro over the last six months or so and that's made Chinese imports very competitive, and they were cheap to begin with.
SNOWDON: By how much has the yuan depreciated?
SIMPFENDORFER: The Chinese yuan has depreciated by almost 22 per cent against the Euro over the last six months. It really is quite a steep decline.
SNOWDON: Ben Simpfendorfer says there's also a downside to China's currency peg at a time when the authorities are trying to rebalance the economy.
SIMPFENDORFER: So long as the currency remains cheap there will be a temptation for the country's entrepreneurs to continue to invest more capital into the export sector, rather than to other parts of the economy that might more benefit private consumption.
SNOWDON: In about a week's time world leaders will be adding the final touches to a climate change agreement for which no middle ground will be acceptable. News of a draft proposal by Denmark, the host of this month's climate change talks, is now leaking into media reports. It says the global cut in emissions should be 50 per cent from 1990 levels by 2050, with most of the cuts, or 80 per cent of them coming from rich countries. Greenpeace manager Yang Ailun adds that China's developing nation status shouldn't prevent it from increasing its own offer in Copenhagen.
YANG: I think that if China says it will do between 45 to 50 per cent, maybe we think that's a more acceptable target. However I think that if the government really puts climate change high up on its agenda, maybe China could do even more than that.
