The European Union's trade deficit with China is rising at a steep rate, the bloc's economic and monetary affairs commissioner said Tuesday, urging Beijing to address the issue. "The trade deficit of Europe against China is increasing at a very quick rate," Joaquin Almunia told a press briefing.
"So we (hope) that the authorities will intensify the quality and quantity of decisions that they adopt." According to the European Commission, the EU ran a trade deficit of 128 billion euros (175 billion dollars) with China last year. The shortfall is likely to balloon to 170 billion euros this year on current trends.
The EU and the United States, which also has a trade gap with China, have criticised Beijing about the value of the yuan, saying the Chinese currency is massively undervalued to give Chinese exporters an unfair advantage. China de-linked the yuan from the US dollar in 2005, and has since allowed it to rise nearly 10 percent against the greenback.
However, in the same period, China's currency, also known as the renminbi or RMB, has actually weakened against the euro. "The impact of these measures has not been very big when you consider the bilateral exchange rate between the RMB and the euro," said Almunia.
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