Weak Chinese currency a 'major problem': EU

BRUSSELS: New EU trade chief Karel De Gucht on Tuesday ramped up Brussels concerns over the weak Chinese yuan, saying a "deliberate" policy in Beijing was a "major problem" for global economic recovery.

"It is obvious that the undervaluation of the Chinese currency is a major problem," he said after a confirmation hearing with European Union lawmakers.

"It's not immediately in the remit of my portfolio," De Gucht said, adding: "But it is clear to me that this is a deliberate policy and we should address this at all possible occasions, bilaterally and also multilaterally."

He said an "important re-adjustment of the value of the Chinese currency" would help economic recovery -- which is "important for everybody, and also for China."

Economic relations between Brussels and Beijing have become soured in recent months by a stepping up of seemingly tit-for-tat anti-dumping measures applied on a growing range of products from shoes to screws.

Asked if he thought the border taxes were an appropriate response to currency challenges, De Gucht said they were only a "partial" reply, pointing out that they affect only "two percent of the trade flow between the EU and China."

He underlined: "The overall answer should be the re-valuation of the renminbi."