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| Version 1 | Version 2 |
|---|---|
| US criticises Germany and China policies | US criticises Germany and China policies |
| (about 1 hour later) | |
| The US has criticised Germany's economic policies, saying that its export-led growth model is hurting the eurozone and the wider global economy. | The US has criticised Germany's economic policies, saying that its export-led growth model is hurting the eurozone and the wider global economy. |
| In its biannual report, the US Treasury said that domestic demand growth in Germany had been "anaemic". | In its biannual report, the US Treasury said that domestic demand growth in Germany had been "anaemic". |
| It also reiterated its view that the Chinese yuan, continues to remain "significantly undervalued". | It also reiterated its view that the Chinese yuan, continues to remain "significantly undervalued". |
| The report has criticised Chinese policy before, but criticism of German economic policy is rarer. | The report has criticised Chinese policy before, but criticism of German economic policy is rarer. |
| "Germany's anaemic pace of domestic demand growth and dependence on exports have hampered rebalancing at a time when many other euro area countries have been under severe pressure to curb demand and compress imports in order to promote adjustment," the Treasury said. | "Germany's anaemic pace of domestic demand growth and dependence on exports have hampered rebalancing at a time when many other euro area countries have been under severe pressure to curb demand and compress imports in order to promote adjustment," the Treasury said. |
| "The net result has been a deflationary bias for the euro area as well as for the world economy." | "The net result has been a deflationary bias for the euro area as well as for the world economy." |
| 'Bit strange' | 'Bit strange' |
| Germany is eurozone's largest economy has been one of its key drivers of growth in recent years. | Germany is eurozone's largest economy has been one of its key drivers of growth in recent years. |
| Its importance to the 17-nation bloc has only increased since the development of the region's debt crisis, which has impacted other bigger economies such as Italy and Spain. | Its importance to the 17-nation bloc has only increased since the development of the region's debt crisis, which has impacted other bigger economies such as Italy and Spain. |
| It has been one of Europe's stronger economic performers and its exports prowess is seen as one of its key strengths. | It has been one of Europe's stronger economic performers and its exports prowess is seen as one of its key strengths. |
| The country narrowly avoided recession earlier this year, but GDP in the second quarter of 2013 was driven up by demand from both consumers and businesses. | The country narrowly avoided recession earlier this year, but GDP in the second quarter of 2013 was driven up by demand from both consumers and businesses. |
| Analysts said that while Germany could benefit from boosting domestic demand, the criticism levied on its policies was unfair. | Analysts said that while Germany could benefit from boosting domestic demand, the criticism levied on its policies was unfair. |
| "I think this is a bit strange," Tony Nash, vice president at IHS, told the BBC. "The eurozone has to get growth from somewhere and Germany is the most likely place for that to happen." | "I think this is a bit strange," Tony Nash, vice president at IHS, told the BBC. "The eurozone has to get growth from somewhere and Germany is the most likely place for that to happen." |
| "And it is better for eurozone to have a highly concentrated, efficient and skilled export powerhouse in Germany than not have any major engine of growth," he added. | "And it is better for eurozone to have a highly concentrated, efficient and skilled export powerhouse in Germany than not have any major engine of growth," he added. |
| Yuan concerns | |
| In recent years, the US and many other economies have alleged that China tries to keep the value of its currency artificially low. | |
| They say that, by doing so, Beijing gives an unfair advantage to its exporters as an undervalued currency makes its good cheaper to foreign buyers. | |
| For its part, China has been looking to loosen its grip on the currency as it looks to push for a more global role for the yuan. | |
| But Beijing has maintained that a sudden an sharp appreciation in the value of the yuan will hurt its overall economy. | |
| The yuan has risen nearly 12% against the US dollar since June 2010. | |
| While the Treasury acknowledged that the yuan had been rising, it said the appreciation was "not as fast or by as much as is needed". | |
| "On the other hand, the evidence that China has resumed large-scale purchases of foreign exchange this year, despite having accumulated reserves that are more than sufficient by any measure, is suggestive of actions that are impeding market determination and a currency that is significantly undervalued," it added. | |
| However, the report did not label China as a currency manipulator. |