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France's Hollande criticises inflexible yuan

November 05, 2012

A 100 yuan banknote (R) is placed next to a $100 banknote in this picture illustration taken in Beijing in this November 7, 2010 file photo. – Reuters (File Photo)

VIENTIANE: French President Francois Hollande on Monday criticised the inflexibility of the Chinese yuan and certain other Asian currencies during a high-profile visit to the region aimed at boosting economic ties.

“Some Asian countries, notably China, have currencies that are not convertible,” he told reporters on the sidelines of an Asia-Europe summit in Laos.

“We have to push for reform of the international banking sector so we can have more balanced exchange rates,” he added.

Western nations frequently criticise Beijing's tight grip on the yuan, arguing that it gives the Asian giant an unfair trade advantage.

“We have to be competitive but that requires fair exchange rates, meaning that there is no unfair competition,” Hollande said.

“France has to make efforts to be competitive but at the same time Asia must also understand that we have to rebalance our trade.”

He said France “cannot accept” its 27-billion-euro ($35 billion) annual trade deficit with China, noting it was almost 40 percent of the country's total trade shortfall.

Hollande and other Asian leaders arrived in Laos on Monday on a mission to reassure Asia they are finally getting a grip on the eurozone debt crisis.

The diplomatic offensive is seen as a sign of the growing importance that Europe places on Asia's vibrant economies, and its desire to counter increased US engagement in the region.