China urges respect, not threats, from US on yuan

Beijing, Mar 29 | Updated: Mar 30 2007, 05:59am hrs
China chided US lawmakers on Thursday for resorting to threats in their latest attempt to persuade Beijing to let the yuan rise faster. Two leading US Senate critics of Chinas currency policy said on Wednesday they expected Congress to pass a veto-proof bill to force China to allow a greater appreciation in the yuan.

Asked about the legislative initiative, foreign ministry spokesman Qin Gang acknowledged that there was criticism in some US circles of its large trade deficit with China. It needs both sides to take the principle of mutual respect to increase understanding and strengthen communication rather than resorting to pressure or threats, he told a news conference.

Sen Charles Schumer, a New York Democrat, and Sen Lindsey Graham, a South Carolina Republican, said their bill would be carefully crafted to abide by World Trade Organisation rules. By Washingtons figures, the US trade deficit with China last year was a record $232.5 billion. Critics say the big surplus is due in large part to a yuan exchange rate that they say Beijing keeps unfairly low, giving Chinese exporters a competitive edge in world markets. But Qin said Chinas currency policies were not to blame. It is not reasonable or fair to blame China for problems in the U.S. economy, he said.

Qin also questioned why a country with a market economy would try to adopt an interventionist attitude when it came to policies of other countries.Should Chinas policies reflect its own market or the voices of people in another country he asked.The yuan, also known as the renminbi, has risen almost 5 percent since it was revalued by 2.1 % against the dollar in July 2005 and untethered from a dollar peg to float within managed bands.

On the question of the renminbi exchange rate, we have consistently adopted the principle of responsibility and independence, Qin said.

Reuters