* Beijing reiterates enactment of currency law would hurt
* Warns again of trade war if bill becomes law
* Says U.S. arms sales to Taiwan undermines China's core
By Michael Martina
BEIJING, Oct 10 China warned the United
States that it would damage relations, and American jobs, if it
forces Beijing to let its currency rise under a law to be voted
on in the U.S. Senate on Tuesday.
Vice Foreign Minister Cui Tiankai on Monday underlined
Beijing's opposition to the bill, saying it could trigger a
trade war and hold back global economic recovery. He said that
relations could also be hurt by U.S. arms sales to Taiwan.
"(The currency bill) in no way represents the reality of the
economic and trade relationship between China and the United
States, and it might have an adverse impact on the development
of the relations between the two countries," he said.
"Should the proposed legislation become law, the only result
would be a trade war between China and the U.S. and that would
be a lose-lose situation for both sides," said Cui, who
currently heads the China delegation for G20 negotiations.
China's central bank, and commerce and foreign ministries
last week jointly warned that enactment of the proposed currency
law could lead to a trade war between the world's two top
"If this type of situation occurs, of course it would be
detrimental to the development of economic and trade relations
between China and the U.S. and detrimental to U.S. economic and
job growth," Cui said. "At the same time, it would hinder global
The White House has voiced concerns that the legislation,
which calls for tariffs on imports from countries with
deliberately undervalued currencies, could violate international
Many economists say China holds down the value of its yuan
to give its exporters an edge in global markets.
Beijing says it is committed to gradual reform of the yuan,
which has risen 30 percent against the dollar since 2005.
U.S. supporters of the bill say the Senate is almost certain
to approve it. But the bill faces stronger opposition in the
House where it may never face a vote.
Cui also reiterated China's stance that U.S. arms sales to
Taiwan seriously undermine the nation's core interests and would
harm ties between Washington and Beijing, weeks after the United
States said it would sell $5.85 billion in military hardware to
the island China calls a breakaway province.
The sales to Taiwan have been a persistent irritant in
Sino-U.S. ties, adding to economic strains between Washington
"These arms sales are not consistent with the trend and
requirement of peaceful relations currently prevailing across
the Taiwan Strait," Cui said. "From a long term perspective, I
also don't think it serves the United States' own interests."
The Obama administration said last week that it is weighing
fresh arms sales to Taiwan as part of a sweeping effort to deter
any Chinese attack on the island.
Such supplies would be on top of plans sent to Congress on
Sept. 21 to sell new hardware and defense services, including
upgrades for Taiwan's 145 F-16 A/B fighter aircraft, bought in
Cui said China welcomed a positive and constructive U.S.
military presence in the Pacific, but added that "some outside
powers" had inflamed tensions in the disputed South China Sea.
He did not specify which countries he was referring to.
"I think some people are stirring up the issue. That is to
say, some people don't want to see stability in the region or
the development of relations between China and relevant
countries," Cui said.
China, the Philippines, Vietnam, Brunei, Malaysia and Taiwan
have conflicting claims of sovereignty over parts of the
potentially oil-and gas-rich body of water crossed by key
shipping lanes and dotted with uninhabitable small islands,
rocks and reefs.
China's growing military might at sea is triggering regional
jitters that have fed into long-standing territorial disputes,
but Beijing insists it is merely holding to its centuries-old
sovereignty over the waters.