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China has ‘confidence’ in euro, says Sarkozy

Text by News Wires

Latest update : 2011-08-25

French President Nicolas Sarkozy has said that the Chinese President Hu Jintao has “confidence” in the euro Thursday, following talks between the two countries during a short stopover in China by Sarkozy.

AFP - China's president has expressed confidence in the euro, visiting French President Nicolas Sarkozy said on Thursday, as concerns about the future of the 17-nation eurozone intensify.

"President Hu is not worried by the situation in the eurozone. He told us he had confidence in the euro," Sarkozy told journalists after holding talks with President Hu Jintao in Beijing.

China has invested an increasing portion of its world-leading foreign exchange reserves in euro-denominated assets.

The French president, who is on a brief stopover for talks with Hu, said the two nations were agreed on the importance of international coordination on the sovereign debt crisis that has caused global stock markets to plunge.

"(We agreed) on the need to coordinate the policies of the G20 members to take measures to reinforce global confidence," he said.

France currently holds the rotating presidency of the Group of 20 forum of the world's 20 largest economies, which will meet in the coastal resort of Cannes in November.

Sarkozy said China, the world's second largest economy, had an "essential role" to play in the group's attempts to address the sovereign debt crisis threatening the global economy.

"As president of the G20, I never imagined not coming to China to talk to my Chinese friends about the major economic issues that are preoccupying the world," the French president told Hu in the Great Hall of the People.

"The G20 summit must... take decisions and participate in the revival of global growth. This is a major issue and China has an essential role to play."

The two presidents also agreed that the yuan should move towards greater convertibility, Sarkozy said.

China continues to maintain significant restrictions on its currency so that the yuan cannot be freely bought and sold around the world.

But Beijing has recently begun to loosen up its foreign exchange rules in the face of accusations from its major trading partners that it is artificially undervaluing the currency to fuel exports.

The French president is spending just five hours in Beijing, where he had a working dinner with Hu before delivering a statement to the media.

Sarkozy is facing an uphill struggle to win re-election next year in the face of a stuttering economy. In July, polls in France showed his approval rating flatlining at 34 percent.

Chinese leaders have repeatedly expressed confidence in eurozone economies during the debt crisis.

However in recent days China's state-run media has run critical coverage, this week comparing the current situation with the plague that hit the continent in the 14th century.

"The sovereign debt crisis, like the Black Death in the 14th century, has spread around eurozone countries, from Greece to Ireland, Portugal, Spain," said a comment piece in the overseas edition of the People's Daily on Monday.

The conflict in Libya, where France has played a major role in support of the rebel opposition, was also expected to be on the agenda for Sarkozy's talks with Hu.

Sarkozy flew into China hours after meeting the prime minister of Libya's rebel National Transitional Council, Mahmud Jibril, as fighters in the capital Tripoli sought to deliver a knockout blow to Moamer Kadhafi's 42-year regime.

Beijing, which has invested billions of dollars in rail, oil and telecoms in Libya, opposed NATO airstrikes there and initially maintained a policy of non-interference and public neutrality on the conflict.

But it then shifted its position and started opening contacts with the rebels. After opposition forces in the war-torn North African country entered the capital Tripoli, Beijing said it "respects the Libyan people's choice".

It has urged the United Nations -- and not the Western powers that backed the opposition movement -- to lead the reconstruction effort in the oil-rich North African country, a position that France also adheres to.


Date created : 2011-08-25


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