NANJING, China (MNI) - The European Union would like an immediate and orderly appreciation of the yuan, but officials came out of meetings with their Chinese counterparts Sunday downplaying the likelihood of that happening in the short-term.

European Central Bank President Jean-Claude Trichet, European Commissioner for Economic and Monetary Affairs Joaquin Almunia and Eurogroup Chairman Jean-Claude Juncker told reporters here Sunday that they had useful discussions covering a host of issues, including the exchange rate.

But, while Chinese officials told them that the currency reforms introduced in 2005 would be implemented, they were also told of the difficulties in resuming the appreciation of the currency in the near term.

"I can't say that I am more optimistic than before I came here," Juncker admitted.

He said that Europe is "not advocating a dramatic change, but an orderly appreciation," but also suggested that Chinese officials talked up the constraints they face in allowing the currency to resume appreciation.

"They are explaining that the internal situation in China is characterized by the fact that 40 million people are living with less than one dollar per day and it's hard to convince the Chinese public" of the benefits of appreciation, Juncker said.

Trichet noted that Chinese officials reiterated their commitment to the currency reforms originally launched in 2005, but also played down the chances of anything happening in the short-term.

"They did confirm that they will implement the '05 decision to modernize the exchange markets, but I will not over-interpret (that)," Trichet said.

"It is their decision and we will see," Juncker said, adding that appreciation would be in the best interests of the Chinese and European economies.

He also said that a weak dollar is in the interests of neither China nor the United States.

The yuan has fallen by nearly 14% against the euro over the past year, the result of State Council decision to repeg the currency to the dollar in the middle of 2008 to help the export sector in the face of sharply slowing global economic activity.

Despite excitement in the markets earlier this month after a change in central bank wording suggested appreciation was set to resume, sources have told Market News International that there are no short-term plans to depeg the yuan as long as the Chinese and global economic recoveries are in such fragile states.

Trichet, Juncker and Almunia met with their Chinese counterparts, including People's Bank of China Governor Zhou Xiaochuan, on Saturday and Sunday before the start of the EU-China summit here Monday.

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