Tuesday, October 12, 2010

Canada Presses China to Stop Subsidizing Exports

(CTV News)

Canada joined a growing chorus of industrialized nations calling on China to stop keeping its currency artificially weak, warning Saturday that it could endanger the global economic recovery. Finance Minister Jim Flaherty said that China's policy of keeping the value of the yuan low will hurt manufacturers in Canada as well as the United States.

"If other countries are subsidizing their exports and we're not, then we're at a competitive disadvantage," Flaherty told a media round-table during meetings of the International Monetary Fund in Washington. "We do not want to see Canada disadvantaged by other countries unfairly taking advantage of artificially inflexible currencies."

Finance ministers and central bankers from the IMF's 187 member states are in Washington this weekend to discuss a looming "currency war," an escalating economic dispute between rich nations on one side and China and developing nations on the other. Artificially manipulating currencies may endanger the fragile global economic recovery, industrialized nations have warned. Read more here.