EU should not press China on yuan, says PM Wen

The European Union should stop pressing China to revalue the yuan as a rapid revaluation could cause turmoil, Chinese Premier Wen Jiabao said on Wednesday.
Wen told an EU-China business forum on the sidelines of a summit with European Union leaders that a sharp appreciation of the currency could lead to social unrest in China, with severe consequences for global stability.
However, he stressed Beijing would implement a reform in the exchange rate regime of its non-convertible currency which would lead to a gradual rise.
"Do not work to pressurise us on the renminbi rate," the premier said, departing from a prepared speech. "Yes, we are going to proceed with the reforms."
He noted that a U.S. congressman had predicted social unrest in China if there was a rapid rise in the yuan exchange rate.
"If China saw social and economic turbulence, then it would be a disaster for the world," Wen said.
"Many of our exporting companies would have to close down, migrant workers would have to return to their villages."
Since China ended its peg with the dollar on June 19, the yuan has gained 2.4% against the U.S. currency but fallen in value by 9.3% against the euro.
Euro zone policymakers urged China this week to allow a substantial appreciation, and European Council President Herman van Rompuy told Wen in a speech at the business forum that multilateral cooperation on currencies would send a strong signal to world markets.