France pressures China on yuan, climate

PARIS, July 20 (Reuters) French President Nicolas Sarkozy said today the value of the yuan was a problem and he would like to discuss the currency with the Chinese authorities as well as their attitude towards global warming.

Sarkozy, who is well known for his complaints about currency values, was speaking after meeting with British Prime Minister Gordon Brown.

''We have two problems (with China). The first is the value of the yuan. It's a question that I would like to discuss with our Chinese friends because the way the parities of currency are organised is an important question,'' Sarkozy said at a joint news conference with Brown.

Sarkozy has for months been calling for the European Central Bank to talk more with politicians about taking the euro's strength into account when monetary policy is set. The ECB has strongly defended its independence on rate-setting.

Sarkozy's complaints are seen as an effort to take on board the concerns of French business leaders who say their exports are being hurt by the euro's strength against the US dollar, as well as currencies such as the Chinese yuan.

Sarkozy said the second problem with China was over climate change.

''A big country like China must participate in respecting the balances of the planet. It's an fundamental question. It's not a question of giving lessons to people,'' he said.

''Who could imagine that China, India, Indonesia, that the big emerging countries are absent from such an important issue as global warming,'' Sarkozy added.

''So we must continue to talk to them.'' He said China had an important role to play in the world, particularly in resolving the crisis in Darfur: ''We need China.

On Darfur, China can have a determining influence.'' China, which has a veto in the UN Security Council, is a big investor in Sudan's oil industry and traditionally wary of imposing UN resolutions on unwilling states. But Beijing is also worried international condemnation of its stance could sully its 2008 Olympic Games.

Sarkozy, who has opposed calls in France for a boycott of the Chinese-organised games, said he was sure that the Chinese would organise the Olympic Games in the ''best conditions''.

REUTERS CS BD1719