China’s Hu heads to G20

Amid pressure over yuan, N Korea:

CHINA: Chinese President Hu Jintao left yesterday for the Group of 20 Summit in Canada where he could face new pressure over China’s currency controls and world efforts to rein in its ally North Korea.

Hu will pay a three-day state visit to Canada before attending the G20’s weekend meeting in Toronto.

It will be his first international appearance since the People’s Bank of China last weekend pledged further reform of the yuan, fuelling expectations Beijing would loosen its grip on the currency.

However, China has doused hopes for a large yuan revaluation sought by trading partners like the United States, and Hu could face calls for a further commitment to free up the currency. World leaders “are going to want more reassurance and more details on what China has in mind”, said Patrick Chovanec, an economist at Tsinghua University in Beijing. “They will want reassurances that this is a genuine commitment on China’s part.” Critics, especially in the US Congress, say China keeps the yuan undervalued by as much as 40 percent to protect exporters, hurting their US counterparts and costing Americans jobs.

Members of Congress — facing mid-term elections in November — have threatened trade sanctions on China and pushed for action at the G20.

China also has been under pressure to join efforts to punish North Korea after the State was accused of torpedoing a South Korean warship in March, killing 46 seamen.

Seoul and Washington, citing a multinational probe blaming North Korea, seek a UN resolution condemning Pyongyang.

China, however, has refused to denounce North Korea — which Beijing helps sustain through trade, economic aid and diplomatic support — issuing only mild calls for restraint and giving no indication it would support UN action.

BEIJING, AFP