* China says not fair to judge yuan based on trade surplus
* Says Japan has no right to criticise yuan policy
* China to push ahead yuan reform as a "responsible country" (Adds quotes and details)
BEIJING, Oct 15 (Reuters) - The United States should not make
the yuan
Speaking hours before the United States faces a decision about whether to formally label Beijing a currency manipulator, Yao Jian said it was not fair to criticise the yuan's exchange rate simply by pointing at China's export strength.
"It is entirely wrong for the United States to make an issue of China's trade surplus and hence put pressure on the yuan exchange rate," Yao said at a regular ministry briefing.
China's trade surplus narrowed a touch in September but has recovered from the depths of the global financial crisis to average more than $20 billion a month for nearly half a year. Already the world's biggest exporter, China has been expanding its international market share, making its managed exchange rate regime an easy target for critics.
"Other countries have no right to comment on what is a reasonable level for a country's trade surplus," Yao added.
A smaller Chinese trade surplus is seen by many economists as an essential component of the rebalancing that is needed to put the global economy on sounder footing.
Yao also singled out Japan, saying that it has no grounds to criticise the yuan.
"Japan is not the right country to say that. It has run a trade surplus against China for eight consecutive years," he said.
Japanese Finance Minister Yoshihiko Noda said this week that the pace of yuan reform had been too slow.
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Currency stand-off ahead of G20 [ID:nLDE69308R
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Yao said that China was a responsible country and would push ahead with currency reform based on its own domestic conditions.
The yuan
Analysts expected that with political pressure before U.S. Congressional mid-term elections in early November and a G20 summit in Seoul in mid-November, the central bank is likely to continue to allow the yuan to appreciate in the near term.
Yao reiterated Beijing's long-standing stance that currency reform would be gradual, arguing that a sharp rise would hit Chinese exporters.
"If the yuan's exchange rate rises by 3 percent, it will put great pressure on some Chinese exporters," Yao told reporters at the sideline of the briefing.
But he also sounded an optimistic note about the impact of yuan reform on most Chinese exporters.
"About 85 percent of export enterprises are private businesses or owned by foreign companies, and are quite able to adjust their product structure when facing exchange rate fluctuations," he said (Reporting by Aileen Wang and Simon Rabinovitch; Editing by Jacqueline Wong and Ken Wills)