In my opinion, one works better than the other when dealing with the Chinese government. Public humiliation and criticism of current policies is not a great way to get the PRC on your side.

China and Europe confronted each other over their long-running trade dispute here Wednesday, with the EU calling for a level playing field and Chinese Premier Wen Jiabao insisting on gradual reform.

The new, aggressive EU China policy is quite a change, but is it smart? I’m skeptical. These guys know how to hit back, and they can get amazingly defensive. Responding to calls for RMB revaluation as a way to solve the trade imbalance, Wen Jiabao let loose with this one:

"The exchange rate is a cause to some extent, but not the sole decisive factor behind the trade deficit."

The weakening US dollar was the main reason the euro was strengthening, Wen later told journalists, adding that Brussels would be better off bringing up the issue with Washington.

"I propose that the best way to address this problem is to take it up with the American financial authorities," Wen said as [EU Prez] Barroso looked on.

Smack!

Well, I suppose they are playing the old good cop/bad cop strategy like the US has been doing. The RMB will have to be revalued pretty soon in any regard, so no matter what happens, I suppose the EU will be able to claim victory.

Click here for the AFP story.