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China says yuan is not cause of trade surplus

Published 03/15/2010, 10:39 PM
Updated 03/15/2010, 10:44 PM

BEIJING, March 16 (Reuters) - China on Tuesday again rejected U.S. demands for a stronger yuan, saying the currency's exchange rate was not a reason for its bilateral trade surplus with the United States.

"If the exchange rate issue is politicised, with the global financial crisis this will be of no help," Commerce Ministry spokesman Yao Jian told a regular news conference.

"The surplus is not caused by the renminbi exchange rate," he added. "The United States should be a promoter of free trade, not an obstacle to it."

Yao was responding to a letter sent by 130 U.S. lawmakers on Monday to the administration of President Barack Obama demanding that he get tough with China over its currency practices. [ID:nN15224170]

"The impact of China's currency manipulation on the U.S. economy cannot be overstated. Maintaining its currency at a devalued exchange rate provides a subsidy to Chinese companies and unfairly disadvantages foreign competitors," the legislators said.

Premier Wen Jiabao on Sunday dismissed U.S. complaints about China's exchange rate, calling them counterproductive and saying he did not believe the yuan was undervalued. [ID:nTOE62D001] (Reporting by Aileen Wang and Chris Buckley; Editing by Alan Wheatley and Ken Wills)

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