Oct. 9 (Bloomberg) -- China was subjected to an onslaught of international criticism on policies ranging from human rights to currency reform as it was pressed this week to live up to its burgeoning superpower status and show greater social and financial responsibility.
The awarding of the Nobel Peace Prize to political prisoner Liu Xiaobo was the most high-profile rebuke as President Barack Obama yesterday acknowledged the Chinese dissident’s plight by demanding his immediate release. Meantime, finance chiefs from Canada to Europe urged the country to allow faster gains in the yuan. It also drew U.S. barbs for its record on global warming.
The criticisms were rejected by Chinese leaders intent on making their own way in the world as they oversee their nation’s transformation from Communist isolation to the globe’s second largest economy and biggest consumer for automobiles and copper. The result may be even greater tension and remonstrations as next month’s Group of 20 summit in Seoul.
“The bottom line is China is growing up faster than it wants to,” said Charles Freeman, a fellow at the Center for Strategic and International Studies in Washington and a former U.S. trade official with responsibility for China. “The rest of the world wants to treat it as a significant power, but China doesn’t want that and prefers to focus on its domestic development.”
Liu, 54, was made a Nobel laureate for his struggle to promote human rights and democracy. While Obama said China has made “dramatic progress” economically, he lamented “political reform has not kept pace.” China’s Ministry of Foreign Affairs released a statement yesterday that the award violates the prize’s purpose and will harm relations with Norway, home to the Nobel Committee.
Liu, a writer, was sentenced to 11 years in prison last December on a charge of plotting to subvert the ruling Communist Party. He had been in custody since December 2008 for his role in organizing Charter 08, an open letter calling for direct elections and the freedom of assembly. More than 300 Chinese academics, lawyers and activists signed the letter.
Elsewhere in Washington, finance ministers used the annual meeting of the International Monetary Fund in Washington to intensify pressure on China to let its currency appreciate more. While the yuan yesterday rose to its highest level against the dollar since 1993, it has risen only about 2 percent since China pledged in June to make it more flexible.
That has played a part in a recent outbreak of speculation that the world is embarking upon a “currency war” as nations are accused of pursuing cheap currencies as a way of driving economic growth through exports. China last year overtook Germany as the world’s largest exporter.
The yuan is “more than undervalued,” said Luxembourg Prime Minister Jean-Claude Juncker, who oversees a panel of euro-area finance ministers. Canada’s Finance Minister Jim Flaherty said it is not in China’s “interest to have currency wars” and warned the risk of protectionism posed a threat to already weak global growth.
Without naming China, U.S. Treasury Secretary Timothy F. Geithner said efforts to rebalance distorted global trade were also being undermined partly by “foreign exchange intervention as countries with undervalued currencies lean against appreciation.” Geithner has linked China’s quest to gain more voice at the IMF with its reluctance to give ground on exchange rate issues.
People’s Bank of China Governor Zhou Xiaochuan said yesterday in Washington that his country has done enough to deserve more say at the IMF, rejecting calls for Beijing to take greater responsibilities in the global economy.
China faces U.S. legislation aimed at prodding it to raise the value of the yuan. Senator Jack Reed, a Democrat from Rhode Island, yesterday told Bloomberg Television’s “Political Capital with Al Hunt” that the U.S. Senate may consider legislative action in a lame-duck session.
Zhou resisted the calls, saying his country aims to avoid any “shock therapy” in its currency reform and that its policy is based on “gradual” change. “China’s exchange-rate policy is based on the market supply and demand relation to move gradually to the equilibrium point,” Zhou said in Washington yesterday during a panel hosted by the British Broadcasting Corp.
Beijing also faced barbs from the chief U.S. climate negotiator.
China’s leaders have acted as though a climate change pact “never happened,” Todd Stern, U.S. special envoy for climate change, said in a speech yesterday at the University of Michigan Law School at Ann Arbor. China in December agreed to the Copenhagen Accord, a non-binding pact that aims to limit emissions blamed for global warming.
“That is a step up in rhetoric” from the U.S., Annie Petsonk, international counsel for the New York-based Environmental Defense Fund, said in an interview from Tianjin where she is attending the climate talks. “It comes at a strange time because it’s likely to trigger a step up in rhetoric from the other side.”
Talks to control global warming stalled this week in Tianjin, in northern China, among negotiators from about 175 governments. China and other developing markets have accused industrialized nations of failing to honor their commitments to curb greenhouse gases.
Huang Huikang, China’s special representative for climate change talks, told reporters yesterday that China’s aim is “not to block discussions” and that developed countries have shown a “lack of substantive progress.”
China has led the world out of last year’s recession with an economy that’s now 90 times bigger than when leader Deng Xiaoping ditched hard-line Communist policies in favor of free-market reforms in 1978. It is the second-biggest importer of crude oil and Chinese companies including PetroChina Co. and China Construction Bank Corp. are among the world’s biggest by market capitalization.
“The Chinese are still reluctant to be global players,” said Kenneth Lieberthal, who was the top Asia expert at the National Security Council under President Bill Clinton and is now a senior fellow at the Brookings Institution. “They are essentially concerned with the development of their own economy, maintaining stability domestically and protecting sovereignty internationally. All are OK as goals, but major powers assume more responsibility than that.”
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