Cameron appeals to China over exchange rate

 
City A.M. Reporter
Prime Minister David Cameron pledged to fight trade protectionism ahead of the G20 meeting, but urged China to move towards greater exchange rate flexibility to safeguard the global recovery.

In a meeting with China's President Hu Jintao in the Great Hall of the People, the two leaders stressed again the importance of developing Britain's relationship with China and pledged to oppose trade barriers, soon before a G20 leaders summit in Seoul.

"Britain will go on arguing that in Europe we should be open to trade from China and not putting up trade walls, and we need you to help us to make that argument about why protectionism is wrong," Cameron told Hu.

Cameron, leading Britain's biggest-ever trade delegation to China on his first visit as prime minister, also welcomed the launch of a $500 million (£313m) Britain-China investment fund by private equity house First Eastern Group.

With Britain angling to double bilateral trade with China by 2015, he said the world's second-largest economy offered prospects for British firms in a raft of sectors including retail, banking, insurance, high-tech and pharmaceuticals.

Cameron later told students at the elite Peking University that China had to move on its exchange rate.

The United States and others have cajoled China to allow its yuan currency to rise faster, and accuse Beijing of keeping it undervalued to gain a trade advantage.

"China is already talking about moving towards increased domestic consumption, better healthcare and welfare, more consumer goods as its middle class grows, and in time introducing greater market flexibility into its exchange rate," he said.

"This cannot be completed overnight, but it must happen," Cameron said.

The prime minister added that China played a vital role in tackling Iran's nuclear ambitions, and called on Beijing to exert more pressure on Myanmar, formerly known as Burma, whose election last weekend has been condemned in the West as a farce.

"I believe China can work with us to improve the situation for the Burmese people," Cameron said. China is one of the few countries that Burma will listen to on this point."