China Rejects U.S. Lawmakers' Pressure on Currency

Thursday, 18 Mar 2010 07:06 AM

 

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China rejected pressure by U.S. lawmakers for Beijing to ease currency controls and accused Washington on Thursday of trade protectionism that it said might hurt the global recovery.

Responding to a letter this week by 130 American lawmakers appealing to the White House to take action over currency, a foreign ministry spokesman insisted Beijing is not intentionally pursuing a trade surplus.

"If a country pressures another to appreciate while at the same time depreciating its currency and using protectionism to restrict imports, it is harmful not only to U.S.-China trade but to trade as a whole," the spokesman, Qin Gang, said at a news briefing.

"Such behavior is a bad example of protectionism that is detrimental to the recovery of the world economy," Qin said.

Business groups say China's currency controls keep the yuan undervalued by up to 40 percent, giving its exporters an unfair price advantage and swelling its multibillion-dollar trade surplus.

This week's letter from American lawmakers appealed to President Barack Obama to label Beijing a currency manipulator in a U.S. Treasury Department report due in April. That could set the stage for a World Trade Organization complaint and possible trade sanctions.

Premier Wen Jiabao said Sunday the yuan was not undervalued and dismissed "finger-pointing" by other governments as unhelpful. He promised exchange rate reforms but said the currency would remain at a "stable and balanced" level.

Beijing has held the yuan steady against the U.S. dollar for 18 months to help Chinese exporters compete amid the global downturn.

Analysts expect Beijing to allow the yuan to rise gradually later this year but say it is likely to gain no more the 5 percent against the dollar by the end of 2010. But some say Chinese leaders might delay acting because they don't want to be seen as giving in to American pressure.

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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