After managing flawlessly to translate: "For the ideal that I hold dear to my heart, I would not regret a thousand times to die" and "My conscience stays unstained in spite of rumours and slanders from the outside", interpreting his more important words on the Chinese currency was relatively straight forward, and the message was crystal clear.
"First of all, I do not think the renminbi (yuan) is undervalued," he said. "We are opposed to countries pointing fingers at each other or taking strong measures to force other countries to appreciate their currencies. To do this is not beneficial to reform of the renminbi exchange-rate regime."
The value of the renminbi looks set this year to dominate relations between the world’s largest economy and its third-largest. The first is a nation struggling to revive its waning economic might while the other has a cautious eye on superpower status and is showing an increasing assertiveness in its dealings on the world stage.
When it comes to the value of its currency, China wants to show that it will not be budged. This is not only an issue vital to its economic interests but one of national pride: Beijing does not want to be seen by its people to be bowing to international pressure. Indeed, it cannot afford a perception of weakness among people who expect their Communist Party leaders to stand up to the Western bullies the state-run media has created.
One newspaper commentary today took inspiration from the independent spirit of the blue-skinned heroes of Avatar. It said: "Like the Na’vi, we’ll decide, thanks." Signals are that a clash is brewing. Indeed, can it be averted? Relations between China and the United States got off to a rocky start this year with Washington’s decision to proceed with sales of arms to Taiwan and Barack Obama’s meeting, albeit private, with the Dalai Lama, whom Beijing abhors.
But the renminbi matters more to both sides.
The dispute is worsening. A bipartisan Bill was introduced this week in the US Senate that aims to press Beijing to let its currency rise in value.
Many lawmakers believe that the yuan is undervalued by as much as 25 per cent, giving Chinese companies an unfair edge in trade, particularly at a moment when the US economy is struggling to recover from its worst downturn since the 1930s.
US Treasury Secretary Timothy Geithner stepped into the fray, saying China would eventually decide that it needs to adopt a flexible exchange-rate policy.
Even the managing director of the International Monetary Fund, Dominique Strauss-Kahn, added to the pressure on Beijing, saying that the yuan was undervalued.
With a rise in inflation — a spectre that haunts the leadership — Premier Wen may well privately feel there is a case for action after effectively a 20-month peg of the yuan to the dollar.
The latest increase in inflation showed that real returns on bank deposits had slipped into negative territory. No wonder that the Chinese are pouring their cash into concrete assets — literally — by investing in property, a trend that is fuelling fears of a housing bubble.
Jim O’Neill, Goldman Sachs chief economist, was this week more measured on the renminbi anxieties, saying he did not believe that the currency was much undervalued. "It’s unfortunate that we have so much political angst around this. The key thing is that, post-crisis, China is importing a lot."
But the interpreting of Premier Wen’s remarks by the elegant and erudite Ms Zhang served to raise hackles in Washington. Mr Wen called US complaints "a kind of trade protectionism".
That only fuelled the fury of US senators. And further public calls on China to act will only prompt Beijing to slow any plans it may have even further to ensure that it is not seen as bowing to outside pressure.
It is far from clear how this impasse in Sino-US ties can be broken while allowing both sides to save face.
David Mikael Taclino
Inyu Web Development and Design
Creative Writer
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