No Change On Yuan, No Progress On Pyongyang

China hasn’t budged from its position of being willing to allow the yuan to appreciate against the dollar but only when it is good and ready. The issue came up, inevitably, at the latest round of high-level dialogue between the two countries in Beijing. China has also hitched the question of the U.S. easing its restrictions on high-tech exports to the currency issue, which will further ensure nothing happens anytime soon. But the tone of the talks was amicable, including even the warning to Washington to keep its nose out of what Beijing considers domestic affairs — Tibet and Taiwan.

All of which is good as the two countries more pressing issue is what to do about North Korea sinking of the South Korean warship Cheonan. Seoul has suspended trade with Pyongyang and demanded an apology, which is a modest interpretation of the “stern” response it promised to the sinking. North Korea denies any involvement the sinking and has threatened war if sanctions are imposed and to shoot down any psychological warfare apparatus along the DMZ if that is reactivated as Seoul has also threatened. U.S. Secretary of State asked China to help bring North Korea to heel, but the question remains how much influence Beijing holds over the mercurial North Korean leader Kim Jong Il.

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Filed under China-Koreas, China-U.S., Economy

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