BEIJING (Reuters) - China’s foreign ministry told the United States on Tuesday to stop pointing its finger at Beijing and pushing for a stronger yuan, saying Washington should focus on spurring its fragile economy.
The strong-worded statement by the ministry came as President Barack Obama kept up tough American rhetoric ahead of mid-term U.S. congressional elections in November and as the yuan extended gains to a ninth day — its longest rally since it was revalued in July 2005.
“Recently, there are some discordant voices in the U.S. criticizing the yuan exchange rate, and saying it (the U.S.) would adopt any possible means to press for yuan appreciation. It is unwise and also near-sighted,” the ministry said in a statement on its website.
“The trade imbalance between China and the U.S. is not decided by exchange rate but by globalization. Yuan appreciation cannot solve the U.S. trade deficit, on which the Americans have also reached consensus.”
U.S. lawmakers maintain that China keeps its yuan currency undervalued by as much as 25 percent to 40 percent, giving its manufacturers an unfair advantage against imports and making Chinese exports cheaper.
On Monday, President Barack Obama weighed in, saying that Beijing had not done enough to raise the value of its currency.
U.S. Treasury Secretary Timothy Geithner vowed last week to rally world powers ahead of a G20 meeting in South Korea in November to push China for trade and currency reforms.
The Chinese foreign ministry said the United States, a major currency issuer, should instead focus on its own economic recovery and put its fiscal house in order to help maintain stability of its own currency.
China has been trying to boost its imports from the United States, but the latter must relax its restrictions on high-tech sales to China, it said.
Beijing’s policy to boost domestic demand to reduce the economy’s reliance on exports were working, it said.
The ministry added that domestic expectations for yuan appreciation were not strong, and that a stronger currency would do little to resolve the Sino-U.S. bilateral trade imbalance.
The yuan rose on Tuesday for a ninth straight day — its longest string of gains since its landmark revaluation in July 2005 — and broke through key resistance at 6.70 per dollar for the first time since its revaluation.
However, a senior Chinese government economist warned that the rise in the yuan, which has gained 1.35 percent since September 9, could soon hit a speed bump.
Chinese officials have repeatedly warned that any sharp currency appreciation could hit exporters and trigger job losses.
Editing by Susan Fenton