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China: Yuan's Exchange Rate of No Concern to Others

Friday, 18 Jun 2010 07:30 AM

The main focus of China's currency policy is the well-being of its people and any adjustment to the exchange rate is not the concern of other countries, government officials said Friday ahead of President Hu Jintao's trip to next week's G-20 meeting.

The gathering in Toronto should focus on the European Union debt crisis and ways countries can cooperate to ensure strong and sustainable economic growth, Vice Finance Minister Zhu Guangyao told reporters.

U.S. lawmakers have strongly criticized China's exchange rate policy, saying an undervalued yuan — also known as the renminbi — has cost millions of American jobs. Washington and other trading partners complain that an undervalued yuan gives China's exporters an unfair advantage.

The yuan has been frozen against the dollar since late 2008 to help Chinese manufacturers compete amid weak global demand. Last year, United States trade deficit with China totaled $226.9 billion.

Hu has promised currency reforms but said Beijing would set the pace of change.

"The renminbi is China's currency and this is not an issue that the international community should discuss," Vice Foreign Minister Cui Tiankai told reporters.

Zhu said China's financial situation was stable under the government's policies, with the fiscal deficit making up 2.9 percent of the gross domestic product last year. Stimulus measures helped drive domestic demand, which was up 18.2 percent in the first five months this year, he said.

"We have to strike a balance between economic growth and structural adjustment. Our ultimate goal is to benefit our people and improve our people's life quality," he said. "And in doing so we also wish to contribute to strong, sustainable and a balanced global economic growth."

China has said that its currency policy posed no obstacle to global economic growth.

Beijing allowed its currency to rise in value from July 2005 until the summer of 2008 by about 20 percent but then abruptly halted the rise when the global economic downturn began amid concern that a stronger yuan would hurt its exports.

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