France's Sarkozy Lobbies China for Rise in Yuan

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French President Nicolas Sarkozy is visiting China and much of his business has to do with business. Traveling with French business leaders, he calls on China's President Hu Jintao to let the yuan rise more swiftly against the euro.

RENEE MONTAGNE, host:

This is MORNING EDITION from NPR News. I'm Renee Montagne.

STEVE INSKEEP, host:

And I'm Steve Inskeep.

The president of France is visiting China today. And much of his business has to do with business. Nicolas Sarkozy is traveling with French business leaders. And among other things, they're selling Airbus planes and nuclear reactors.

NPR's Anthony Kuhn is covering the visit. And Anthony, to what extent does France competing with Americans for Chinese money here?

ANTHONY KUHN: Well, this is sort of a trade diplomacy that's going on. And a lot of people feel that sometimes the Chinese play off the Europeans versus the Americans. The example today, of course, is the sale of Airbus jets to China, $15 billion worth of planes. And sometimes people feel that when relations are a little bit better with America they give the deal to Boeing, and when they're better with Europe they give it to Airbus. So in this particular instance it seems that China wants to reward Europe.

INSKEEP: Do you see a parade of European leaders going to Beijing?

KUHN: Yes, this sort of trade diplomacy has become a fairly standard thing now. Of course this is the first trip for Sarkozy. And we should say that President Sarkozy was quite direct. He stood right next to President Hu Jintao in public and asked for President Hu in China to let their currency, the yuan, appreciate, because the strong Chinese currency now and the trade deficit that the European Union is running against China is a big source of friction at the moment.

INSKEEP: You're talking about the Chinese currency being kept by some estimates artificially low, which makes Chinese exports especially attractive overseas and makes it easier for China to compete. Europeans are concerned about that as well as Americans, you're saying.

KUHN: That's correct. But it's a very interesting situation in that while the Chinese currency, the yuan, has appreciated against the dollar, it's slid against the euro. And that has worsened the trade imbalance for the Europeans.

And what Sarkozy said to Hu was that China is now a strong country and that it should have a strong currency to match. And he put it in terms that Hu was sure to understand. He said the valuation of the currency should be harmonious, and harmonious is President Hu's big buzz word, of course.

INSKEEP: Can I just ask if Europeans seem to view China with the same mixture of excitement and dread that Americans do?

KUHN: I think that's correct to say. It's clear from this visit that they have so many issues on the table they have to deal with. And Sarkozy said that China's importance in the world is growing and therefore it has to play a bigger role. There were deals signed today on nuclear energy. Sarkozy called for more carbon-free and environmentally-friendly growth in China.

And on the diplomatic front, there are so many things that China is playing a crucial role in. Sarkozy mentioned Iran, China's dealings with Myanmar, and also it's economic aid to Africa. And he also said that he wanted to see more rule of law, lighter use of the death penalty in China, and also more press freedom. And in response President Hu Jintao invited Sarkozy to the Olympics, next Beijing in August, which Sarkozy accepted.

INSKEEP: They didn't actually say there would be a change in human rights in China but said come on to the Olympics.

KUHN: That's right. Hu did not commit himself to anything on the human rights issue.

INSKEEP: NPR's Anthony Kuhn reporting today from Chongqing, China.

Anthony, thanks very much.

KUHN: Thank you, Steve.

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