Paulson says yuan rise will help China despite pain

BEIJING, April 3 (Reuters) - It could be dangerous for China if currency values do not reflect fundamentals, U.S. Treasury Secretary Henry Paulson said on Thursday.

"China's economy is so large, complex and integrated that it is dangerous if it does not have an RMB that reflects fundamentals," Paulson told reporters in Beijing after delivering a speech on environmental issues.

Paulson added that the yuan's rise so far has been helpful and will help to contain inflation, now near a 12-year high.

The renminbi (RMB), or yuan, has risen about 4 percent against the dollar so far this year, taking its cumulative gain since July 2005 to 18 percent.

"Appreciation so far has been good and gives a tool for dealing with rising inflation," Paulson said, adding that there was no sign that Chinese economic growth had been hurt by the yuan's rising exchange rate. (Reporting by Glenn Somerville; Editing by Alan Wheatley and Edmund Klamann)