China And Europe Avoided The Exchange Rate War &Nbsp, And The Trade War Was Quietly Heating Up.

China and Europe are likely to bypass a currency war, but the risk of bilateral economic and trade frictions is rising quietly.

In the European trip from October 2nd to 8, Premier Wen Jiabao of China's State Council appealed to Europe for many times not to take part in the United States' chorus of "repression of RMB appreciation".

He also expressed the determination of China to reform the exchange rate formation mechanism and promised that China would ensure a fair investment environment.

The EU's position on the RMB exchange rate and Sino EU economic and trade relations is markedly different.

EU Trade Commissioner Teguh Hurt confirms that the EU will not pass the punishment.

Teguh Hurt explained that the trade remedy measures are aimed at those who do not want to be open to the EU.

Although Teguh Hurt said that the EU would not pressure the RMB exchange rate by legislative means as the United States did, there were still some differences between China and Europe on the issue of exchange rate.

In October 5th, Wen Jiabao and the euro zone "three carriages" (that is, the European Commission finance and Monetary Affairs member, Ollie Rehn, the chairman of the euro zone Juncker, the European central bank governor Tyse) specifically negotiated on the exchange rate issue.

An official attending the talks revealed that the EU's demand was RMB appreciation of 5% of a basket of major currencies, including the euro.

He said that the key point of EU concern is time - when we can see the effect of China's exchange rate reform.

After the meeting, Ryan hinted to the media that the renminbi was undervalued against the euro.

He said that if the euro continues to bear a disproportionate burden in the current international exchange rate adjustment, the recovery of the euro area economy may weaken.

On the issue of exchange rate, the United States has been the vanguard of oppression of RMB appreciation, but the European Union has recently begun to demand RMB appreciation in more and more public occasions.

The official said recently that the European Union was under increasing pressure from the United States.

"Exchange rate is an important issue, but we have more concerns in the field of trade, such as the investment environment of European enterprises in China," said Carsten Dannohl, a senior European business consultant.

Commercial Europe is one of the most influential commercial organizations in Europe, representing 2000 000 enterprises in 34 European countries.

Since the beginning of this year, European companies' complaints about China's investment environment have been louder and louder.

Barroso, the chairman of the European Commission, even told the business summit that China should further open the market and treat European enterprises fairly.

In this regard, Wen Jiabao promised, "all enterprises registered in China enjoy national treatment. The products manufactured by foreign-funded enterprises in China are made in China. We should not only protect your intellectual property rights, but also protect all your legitimate rights and interests".

However, the EU stressed that the European business community "now wants to see concrete actions".

The EU has already begun to take "concrete actions" that are difficult to measure.

Teguh Hurt made clear to reporters that the EU will introduce new trade remedy measures at the end of October in the trade policy document.

The measure is aimed at restricting some third country enterprises bidding for EU government procurement projects.

Teguh Hurt said that the EU's government procurement market is now completely open, and some countries do not open the market to the EU.