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China and the EU conversing in Beijing

China correspondent Georg Blume believes it is a "cardinal error in the West's China policy" to demand that the Chinese government revalue the yuan. "This is precisely what French President Nicolas Sarkozy and the President of the European Central Bank, Jean-Claude Trichet, have done in Beijing. They were following the example of many members of the US government in line with the false motto: China's exports are damaging our growth. With this policy they risk slowing down the motor which drives the global economy. Over the past ten years China's cheap exports have made a substantial contribution to deflation and macro-economic stability in the West. ... Only the potential of China's huge domestic market can achieve a balance in trade flows. For this to happen, the West and China must join forces to combat the threat of inflation behind the current dollar crisis instead of squabbling over exchange rates and trade deficits."

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