U.S. Treasury Secretary Timothy Geithner.KEVIN LAMARQUE
China's Foreign Ministry on Monday hit back at fresh calls by the United States for Beijing to let the yuan currency rise in value, saying the exchange rate was not to blame for the U.S. trade deficit with China.
Foreign Ministry spokesman Qin Gang was responding to a question about recent comments by U.S. Treasury Secretary Timothy Geithner as well as calls from U.S. lawmakers to pass a bill threatening to press China over its yuan exchange rate controls.
"A huge amount of facts has demonstrated the renminbi exchange rate is not the main cause of the imbalance in Sino-U.S. trade," Mr. Qin said in a statement on the Ministry's website.
"Do not politicize the renminbi exchange rate issue," he said. The renminbi is another name for the yuan currency.
Mr. Qin said the Chinese government would keep the yuan exchange rate stable at a "reasonable and balanced" level and proceed with reform in a "gradual and controllable" way, in a tone that largely reiterated Beijing's long-standing official line.
He added that Beijing would take both international and domestic economic conditions into consideration when it came to deciding when and how to reform the way it set exchange rates.
China has repeatedly insisted that it will not respond to foreign criticism and will itself decide currency issues.
Beijing is facing international calls to let the yuan return to the path of appreciation after effectively repegging the currency at about 6.83 to the dollar to help its exporters ride out the global credit crunch.
Complaints eased over the last two months as the euro zone debt crisis took centre stage. But U.S. Treasury Secretary Timothy Geithner said last week that the yuan was an impediment to global rebalancing, suggesting that U.S. patience with China's currency policy was wearing thin.
U.S. Senator Charles Schumer said last week that he and other colleagues would push for a vote within two weeks on legislation to allow the U.S. Commerce Department to use anti-dumping and countervailing duty laws against China or any other country with a fundamentally misaligned exchange rate.
Qin Gang said that imbalances in Sino-U.S. trade had mainly been caused by globalization and the international division of labour, citing that a 21 per cent appreciation of the yuan against the dollar since 2005 had not helped to reduce the U.S. deficit.
He said U.S. exports to China has risen about 50 per cent in the first quarter, but Washington's restrictions on high-tech exports were holding back trade.
He urged U.S. politicians to stop pointing figures at other countries and instead rethink their own structural economic faults.
"It is completely unreasonable to politicize the renminbi exchange issue and use the exchange rate issue to engage in trade protectionism against China. The only outcome will be hurting oneself as well as others."