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Minister says China isn't manipulating currency

LOOK AT U.S.
Chen Deming: China's yuan not artificially inflated, he says.

By Staff and Wire Reports
Published: 12/1/2009 2:23 AM
Last Modified: 12/1/2009 5:03 AM

China rejected on Monday the charge that it was keeping the yuan artificially low against the dollar, and it blamed another "major economy" for keeping its own currency weak.

China's trade minister, Chen Deming, didn't name a specific country, but he was widely understood to be referring to the United States.

Many in the West blame Beijing for pegging the yuan at unfairly low rates to help exporters undersell foreign competitors in global markets. Critics say the currency control has aided China's rapid rise this decade as an export powerhouse, costing manufacturing companies and jobs in Europe and the United States.

The yuan's low value against the dollar also distorts other foreign exchange rates, by causing the dollar to weaken against fee-floating currencies such as the euro and pound.

Chen said criticism of China was unfair at a time when the stability of the yuan was contributing to global economic recovery, and he noted that the currency has risen 20 percent in value since Beijing decided to loosen somewhat its peg to the dollar four years ago.

Meanwhile, "there is another major economy in the world which is devaluating its currency," Chen told journalists through a translator in Geneva, where he was attending a World Trade Organization meeting. "But I hardly see any criticisms of this in the media."

Chen also noted that China's trade surplus was falling significantly after reaching $290 billion last year.

He said imports were "growing very fast" even as exports have slowed considerably.

By Staff and Wire Reports

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