BRUSSELS, Nov 25 (Reuters) - European companies urged top euro zone economic officials on Wednesday to push for a stronger renminbi currency when they visit China this weekend.
The call was in a letter to European Central Bank President Jean-Claude Trichet, chairman of euro zone finance ministers Jean-Claude Juncker and Economic and Monetary Affairs Commissioner Joaquin Almunia, who will hold talks on exchange rates with Chinese authorities on Nov 29 in Nanjing.
"Chinese authorities need to consider renewed appreciation of the renminbi and to introduce more flexibility in their currency system," said the letter from BusinessEurope, which speaks for more than 20 million European firms.
"At the same time, it is vital that U.S. authorities make real their pledge of a strong dollar policy," the letter said.
The European business lobby said that since early April the euro has appreciated by almost 13 percent against both the dollar and the Chinese renminbi, and 2 percent on a trade-weighted basis.
"In our view, recent exchange rate developments, and in particular that of the Chinese renminbi, are inconsistent with the objective of an orderly resolution of global imbalances," the letter said. "The euro cannot take the burden of adjustment on its own."
The Chinese renminbi, or yuan currency is effectively pegged to the dollar, which keeps it artificially weak despite China's huge trade surplus.
This gives Chinese exports an advantage, boosts Chinese currency reserves and adds to global trade-savings imbalances.
Europeans believe it is in China's interest to rebalance its growth by reducing dependence on exports and strengthening domestic demand. That would involve allowing the yuan to appreciate and conducting structural reforms, such as an overhaul of China's social security system.
"We encourage Chinese authorities to undertake the necessary reforms to support domestic demand," BusinessEurope said.
(Reporting by Jan Strupczewski, editing by Andrew Hay)
((jan.strupczewski@reuters.com; +32-2-287 6837; Reuters messaging: jan.strupczewski.reuters.com@reuters.net))