Beijing: Chinese Premier Wen Jiabao Sunday spurned foreign calls for the yuan to rise and showed no let-up in scolding the United States over recent bilateral tensions.
Wen said calls from the US and other big economies for China to lift the value of its yuan currency were unhelpful, even protectionist, and vowed that Beijing will steer its own way on currency reform through a risk-filled econ-omic landscape.
"We oppose mutual accusations between countries, and even using coercion to force a country to raise its exchange rate, because that's of no help to reforming the yuan exchange rate," Wen told a two-hour news conference at the end of China's annual parliament meeting.
"We don't believe that the yuan is undervalued."
Blending his trademark folksy tone with a prickliness born of leading the world's fastest-growing major economy, Wen used the keynote event to both cast China as a benign political and economic power and as the victim of unfair international demands.
The US, the European Union and others have long been critical of China's yuan regime. Many US lawmakers complain China's currency is undervalued by as much as 40 per cent, undercutting the competitiveness of US products.
Pressure
The risks of deepening economic tensions between Washington and Beijing now hinge on a decision by the Obama administration about whether to call China a "currency manipulator" in a semi-annual Treasury Department report due out on April 15.
Adding to the pressure, US Senator Charles Schumer said on Friday that he plans to move forward legislation aimed at stopping China from "manipulating" its currency.
Without directly mentioning the US, Wen made clear that Beijing was in no mood to surrender to any demands from Washington and might even be girding for a fight.
"I can understand some countries' desire to raise exports, but what I do not understand is depreciating one's own currency and attempting to pressure others to appreciate, for the purpose of increasing exports. In my view, that is protectionism," he said.
However Wen pressed Beijing's own worries about Washington policy, as he did at last year's news conference
"We are very concerned about the lack of stability in the US dollar. If I said I was worried last year, I must say I am still worried this year," said the premier.
China is the world's biggest holder of US Treasury debt, holding $894.8 billion (Dh3,286 billion) worth.
"We cannot afford any misstep, no matter how slight, in our investments. US debt is guaranteed by the United States government, so I hope that the United States will take concrete steps to reassure international investors," he said.
Beijing and Washington have also recently been at odds over new US arms sales to Taiwan, the self-ruled island China claims as its own territory, and Obama's meeting in the White House with the Dalai Lama, the exiled Tibetan leader reviled by Beijing. "The responsibility for the serious disruption in US-China ties does not lie with the Chinese side but with the US," Wen said in answer to a question about their ties.
Wen also stressed that domestic worries weighed on policy.
"I have said that if there is inflation, plus unfair income distribution and corruption, they will be strong enough to affect social stability and even the stability of the state's power," he said. "It will be an extremely difficult task for us to promote steady and fast economic growth, adjust our economic structure and manage inflation expectations all at the same time."
The ruling Communist Party has sought to use the Party-run parliament to promote plans to raise welfare spending for farmers and other poorer citizens, even as the government tightens its belt after a burst of feverish spending last year.
But the parliament meeting has coincided with the release of data suggesting China faces inflationary pressures that could require more intensive policy tightening.
China escaped the worst of the global slump by ramping up credit, slashing interest rates and launching a four trillion yuan (Dh2.15 trillion) infrastructure stimulus programme in late 2008.
Its economy grew 8.7 per cent last year as a result, by far the fastest pace of any major country.
But price increases have followed in the wake of that burst of spending and easy credit.
