ECB Weber: Chinese Competitiveness Partly Due Fx Intervention

BERLIN (MNI) – European Central Bank Governing Council member Axel
Weber said on Thursday that Chinese competitiveness is partly based on
Beijing’s policy of keeping its currency artificially low through
interventions on currency markets.

In a question-and-answer session at a conference in Berlin, Weber,
who heads the Bundesbank, reminded that during his appearance at the
recent IMF and World Bank gathering in Washington he had objected to the
fact that Germany and China are always lumped together when the subject
of countries with current account surpluses is addressed.

In contrast with Germany, China’s competitiveness “is partly due to
intervention on currency markets,” Weber said. Competitive advantages
should be achieved through reforms on the company level and moderate
wage policies, not through currency manipulation, he stressed.

“A good company should be competitive at any foreign exchange
rate,” Weber said.

–Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com

[TOPICS: M$X$$$,M$$EC$,M$G$$$,MGX$$$,M$$FX$,MT$$$$]