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New Europe - China Special Issue

New Europe - China Special Issue

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Published by: Daniel Temoteo Martins Coelho on Sep 05, 2010
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 July - October 2010 | € 5.00 A New Europe Special Edition
WithintroductoryremarksbyWenJiabao,Herman van Rompuy and José Manuel Barroso
and contributions from 30 political, academic, and civil society leaders
Page 2 | New Europe China July - October 2010
 What happened withthe Chinese yuan
by Dennis Kefalakos
 The decision of the Bank of China to ease the parity of the yuan vis-a-vis the other major currencies of the world, took a concreteform on Monday the 28 June, when the Chinese currency wasset with the dollar, during the procedure of the daily fixing at itsfive year high. It has to be noted that every day officials at thecentral bank of the country set the parity of the yuan with theAmerican currency and they let it oscillate by a margin of only 0.5% during the next twenty four hours.Obviously this appreciation of the Chinese money will make ex-ports from the country a bit dearer and imports cheaper. Thetiming of this crucial move was also important. It came the next working day after the G8 council was convened in TorontoCanada, which ended without any major consensus on the issueof the right policy mix for the world economy. The main goal of this meeting of the eight wealthiest countriesof the world was to set some principles for the allowed volumeof state budget deficits that those economies can still support, without undermining the future equilibrium. The USA wasadamant that generous state spending should continue to sup-port the real and the monetary economy, because the resumptionof growth is still quite uncertain Washington says. On the otherside of the fence Europeans, having found an EU proper agree-ment to drastically cut down excess government spending, they rejected the US approach, because they do not want to furthertest the abilities of the euro, to bear even larger fiscal deficits andmore state debts. The dollar does not seem to have such worries,because it has a lot of backing from the strong world politicalpresence of the United States. At the end of the day howevernone of two, US and EU, did anything concrete to help the worldeconomy overcome the present problems.At this point we should return to the Chinese move to letthe yuan appreciate. To understand the repercussions of thatone should return to the basic theory of international trade. The very idea of external transactions in goods and servicesis, theoretically, the most efficient way to distribute eco-nomic growth and jobs around the world. Practically ex-porters create jobs and incomes at home and importers dothe opposite for their home market. As economists say ex-porters...import jobs and importers...export them. So any action to intervene in world foreign trade affects largely theinternal markets of the interested parties. Since however alltransactions are realized through the exchange of moneys,their rate of exchange plays a vital role in external trade. Ob- viously if the money of a country becomes dearer in termsof monetary units of the rest of the world, this country ismaking its exports equally dearer and at the same time itsimports become cheaper.If we apply this little theory to what China did recently, the con-clusion is that China decided to share some of its economicgrowth with the rest of the world, just by creating a new incen-tive for imports and a new impediment to exports. The same istrue for jobs. The less China exports and more it imports, theoutcome will be that this huge country is actually cooling downits economy, by “exporting” a part of its growth and of coursesome jobs too, to its trading partners mainly Europe and the US.And all that in a time when the West is under the spell of a creditcrisis which led to the worst real economy recession of the lastseventy years. Fortunately the impact on China was minimal andthe country became again the locomotive of the world economicresumption. More so now that Beijing has decided to let the yuan appreciate in relation to all the major currencies and helpthe world recover.
Dennis Kefalakosdkefalakos@neurope.eu
 Alia Papageorgiou (EU Affairs)apapageorgiou@neurope.euKostis Geropoulos (Energy & Russian Affairs)kgeropoulos@neurope.eu Andy Carling (EU Affairs)acarling@neurope.eu Ariti Alamanou (Legal Affairs)aalamanou@neurope.eu Alexandra Coronakis (Columnist)acoronaki@neurope.euLouise Kissa (Fashion)lkissa@neurope.eu
 Alexandros Koronakisakoronakis@neurope.eu
Suman Haquesuman@neurope.eu
 Ania Laraalara@neurope.eu
Lorraine Wilkinsonlwilkinson@neurope.eu
Christina Kapranouckapranou@neurope.euSubscriptions are available worldwide
New Europe is a privately owned independentpublication, and is not subsidised or financed inany way by any EU institution or other entity.
 Av. de Tervuren/Tervurenlaan 96,1040 Brussels, BelgiumTel. +32 2 5390039Fax +32 2 5390339info@neurope.eu
Blvd Napoleon I, 662210 LuxembourgTel. + 352 2637 5959E-Mail:publisher@neurope.eu
Signed Contributions express solely theviews of the writers and do not necessarily reflect the opinion of thenewspaper.
NE is printed on recycled paper.
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© 2010 
New Europe
all rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form by any means, electronic or otherwise, without the permission of New Europe.
Dialogue at the heart of New Europe’s special edition on China
Putting together a special edition on EU-China relations does not require the usual professionalstress that our international edition typically demands. The issues, the people and the economicsectors involved are both important and vast.It suffices to say that our original conceptualization of a 16 page informational supplement with news, analysis, and a few quotes and contributions was trashed, as the explosive interestin this special edition achieved spectacular magnitude. The final product in your hands contains everything, the people who matter, the issues whichshape the relations between Europe and China and the economic sectors which are of primeimportance for two of the largest economic entities in the world. There is of course more to be dealt with, issues which we could devote entire editions too, butit is with some self-criticism that we aknowledge that 40 page supplement could not covereverything. Nevertheless, in inviting all the contributors to participate, we did give them carteblanche. We are very happy that for the first time, so many leading figures have come together, in onepublication, to shape the future of EU-China dialogue. The three leaders presented on page 5, Wen Jiabao, Premier of the People's Republic of China, José Manuel Barroso, President of the European Commission and Herman van Rompuy, Pres-ident of the European Council show, with their participation in this special edition, their spe-cial interest to adding bricks, and strengthening the bridge between the EU and China.It is not only that the Premier and Presidents took the time to come to the same forum for di-alogue in New Europe’s special edition; their remarks dwell deep into the sea of issues whichconnect our two universes- which turn out to be not so far apart after all.In fact all the politicians, the scholars, the analysts and the experts who have come together tomake this edition possible, are covering new territories in this huge field of EU-China relations. The long term strategy of the two sides and the day to day politics and the economic issues, ac-tually constitute an entirely new and vast field of knowledge. The politicians, experts, academ-ics, and analysts have separately dwelled on these issues for a long time. We are delighted to alsobe able to provide a forum for students and bloggers, who have also have a voice in this specialedition. We proudly present to you the New Europe Special Edition on China. We hope you enjoy reading the different perspectives and points of view.
Dennis Kefalakos
, Editor
 Alexandros Koronakis,
New Europe China | Page 3 July - October 2010
 Work Together for anEven Better Future
by Yang Jiechi 
EU-China Relations
by Poul NyrupRasmussen
 With eyes wide openand hand in hand
by Wilfried Martens
 Work Together for anEven Better Future
by Antonio Tajani 
Actively AddressingClimate Change
by Xie Zhenhua
A new era for EU-China relations
by Song Zhe 
China - Europe:Collaboration
by Rodi Kratsa
On the road to greendevelopment?
by Jo Leinen
 Trade and beyond
by CrescenzioRivellini 
China on the rise
by Alexander Graff Lambsdorff  
 We need closer EU-China relations
by Roland Paksas
 The way forward
by Theodoros Skylakakis
Intensive Intimacy 
by Jonathan Story
Perceptions and thegrowth of protectionism
by Stanley Crossick
EU-China Embrace EachOther in the Shanghai Expo
by Chen Zhimin
EU-China Trade:new goals needed
by Duncan Freeman
China and the futureof global governance
by Gustaaf Geeraerts
Business in China -the road to recovery 
by Philippe de Buck
 The Passage to China
by Francisco Jaime Quesado
 The EU, China andEthics in Finance?
by Carol Cosgrove -Sacks
Europe’s strategy towards China
Doing business withEurope
by Zhangming Yang 
Illuminating a “Better City,Better Life” in Shanghai
by JP Tanghe 
 Work Together for anEven Better Future
by Jonathan Holslag 
Should Europe follow into China’s foot steps
by Annette Nijs
European Security: Take China Seriously 
by Dr. Greg Austin
Let China save Europe
by Cristina Manzanoand Richard Youngs
 Whathappened with the Chinese yuan
by Dennis Kefalakos
Russian, Central Asian gas to China?Show Me the Yuan!
by Kostis Geropoulos
Herman vanRompuy José Manuel BarrosoWen Jiabao
Page 5
Leaderson China
Scholars and Expertson China
Ni hao meanshello in Chinese
by Alia Papageorgiou
Columnson ChinaPerspectiveson ChinaNE Partnerson China
Brilliant Prospects for Trade and EconomicCooperation
by Chen Deming 

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