China “adamantly opposes” U.S. currency bill

China’s foreign ministry said it “adamantly opposes” a bill being pushed by the Senate to allow the United States to impose duties on countries that undervalue their currencies.

In a statement posted on China’s official government website (www.gov.cn) on Tuesday, foreign ministry spokesman Ma Zhaoxu warned the United States not to “politicize” currency issues.

He said the United States was using currency as an excuse to adopt protectionist trade measures that violated global trading rules.

“By using the excuse of a so-called ‘currency imbalance’, this will escalate the exchange rate issue, adopting a protectionist measure that gravely violates WTO rules and seriously upsets Sino-U.S. trade and economic relations,” he said. “China expresses its adamant opposition to this.”

Ma Zhaoxu repeated Beijing’s position that it will continue to gradually reform its currency policy, “strengthening the flexibility of the renminbi exchange rate.”

He urged U.S. legislators to “proceed from the broader picture of Sino-U.S. trade and economic cooperation” and “forsake protectionism.”

Senators voted on Monday to open a week of debate on the Currency Exchange Rate Oversight Reform Act of 2011, which would allow the U.S. government to slap countervailing duties on products from countries found to be subsidizing their exports by undervaluing their currencies.

China has routinely denied claims by the United States that the undervaluing of the renminbi has undermined the U.S. economy.

“It is widely understand that the renminbi exchange rate is not the cause of China-U.S. trade imbalances,” Ma said.

China’s central bank said in a statement that the bill failed to address the underlying issues in the U.S. economy.

“The yuan bill passed by the U.S. senate will not solve its problems, such as insufficient savings, high trade deficit and high unemployment rate, but it may seriously affect the whole progress of China’s reform of its yuan exchange rate regime and may also lead to a trade war which we would not like to see.”

It added that Chinese inflation had already pushed the real yuan exchange rate further “toward the equilibrium.”

Meanwhile, China’s Ministry of Commerce said in another statement that any move by the United States to force the yuan to appreciate would undermine joint efforts to revive global economic growth.

Reuters