HELSINKI, Oct 14 (Reuters) - Demand for Chinese products in Europe could weaken and economic growth slow down if China does not let its currency yuan strengthen against euro, European Union's economic and monetary affairs commissioner said.
"Despite its principle decision in June China has not allowed its currency renminbi (yuan) to revaluate and many countries have already made active decision and allowed their exchange rates to devaluate to improve their price competitiveness," Olli Rehn said in a speech on Thursday.
He said EU had stressed in a summit with China last week it is also in the interest of China to avoid slower growth in its most important export market, Europe, where the economy has returned to path of growth. But uncertainty remains.
"Recently the European Union's economic forecasts have been upgraded as growth has strengthened and as employment is slowly improving. Respectively economic forecasts of the United States have been downgraded because the economic growth that had started has slowed down during the second half of this year," Rehn said, referring to unemployment figures.
"World economic recovery will not be very quick because economic growth is slowing down in the Unites States and in addition uncertainty still continues in European financial markets, especially in state bond markets."
(Reporting by Terhi Kinnunen; Editing by Ron Askew)