The US Treasury has blamed Germany's export-led
growth model for dragging down eurozone
The US has criticised Germany's economic policies,
saying that its export-led growth model is hurting
the eurozone and the wider global economy.
In its bi-annual report, the US Treasury said that
domestic demand growth in Germany had been
"anaemic".
It also reiterated its view that the Chinese yuan
continued to remain "significantly undervalued".
The report has criticised Chinese policy before, but
criticism of German economic policy is rarer.
"Germany's anaemic pace of domestic demand growth
and dependence on exports have hampered
rebalancing at a time when many other euro-area
countries have been under severe pressure to curb
demand and compress imports in order to promote
adjustment," the Treasury said.
"The net result has been a deflationary bias for the
euro area as well as for the world economy."
'Bit strange'
Germany, the eurozone's largest economy, has been
one of its key drivers of growth in recent years.
Its importance to the 17-nation bloc has only increased
since the development of the region's debt crisis, which
has affected other bigger economies such as Italy and
Spain.
Germany has been one of Europe's stronger economic
performers and its exports prowess is seen as one of its
key strengths.
It narrowly avoided recession earlier this year, but GDP
in the second quarter of 2013 was driven up by
demand from both consumers and businesses.
Analysts said that while Germany could benefit from
boosting domestic demand, the criticism levelled at its
policies was unfair.
"I think this is a bit strange," Tony Nash, vice president
at IHS, told the BBC. "The eurozone has to get growth
from somewhere and Germany is the most likely place
for that to happen."
"And it is better for the eurozone to have a highly
concentrated, efficient and skilled export powerhouse
in Germany than not have any major engine of
growth," he added.
Yuan concerns
In recent years, the US and many other economies
have alleged that China tries to keep the value of its
currency artificially low.
They say that, by doing so, Beijing gives an unfair
advantage to its exporters, as an undervalued currency
makes its good cheaper to foreign buyers.
For its part, China has been looking to loosen its grip on
the currency as it looks to push for a more global role
for the yuan.
But Beijing has maintained that a sudden and sharp
appreciation in the value of the yuan will hurt its overall
economy.
The yuan has risen nearly 12% against the US dollar
since June 2010.
While the Treasury acknowledged that the yuan had
been rising, it said the appreciation was "not as fast or
by as much as is needed".
"On the other hand, the evidence that China has
resumed large-scale purchases of foreign exchange this
year, despite having accumulated reserves that are
more than sufficient by any measure, is suggestive of
actions that are impeding market determination and a
currency that is significantly undervalued," it added.
However, the report did not label China as a currency
manipulator.
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