As the US President Barack Obama vowed to get "much tougher" with China on exchange rates and trade, economists from Beijing said China should not give in to increased US pressure that stems from its domestic problems.

Obama's talk of putting "constant pressure" on China to strengthen the yuan so to ensure the price of US goods was not artificially inflated has drawn heated comments from economists in Beijing.

"His words are only aimed to appeal to domestic interest groups," said Tan Yaling, an expert at the China Institute for Financial Derivatives at Peking University.

Given China's growing international clout and the lack of jobs in the United States, Obama will certainly try to make China change its currency policy as this is an easy way to weaken China's export industry, she said.

It was also a relevant tactic given the President was losing ground in opinion polls and facing tough conditions leading up to the mid-term election later this year, she said.

Although the US economy recovered to 5.7 percent growth in the fourth quarter last year, a record high in six years, jobless rate surged to more than 10 percent.

Fiscal deficit is set to hit US$1.56 trillion in 2010, or 10.6 percent of its GDP, a new record since the Second World War.

In the State of the Union Address on January 28, Obama made it clear he would focus on jobs in 2010 and pledged to double exports in five years which could create 2 million jobs in the States.

Tan Yaling said Obama's export drive could not fix the job problem, while a stronger yuan would add costs for US consumers.

Resist pressure

It's an old trick for the US to force its major trade partners to appreciate their currency to help itself in a time of crisis, said Zhang Yansheng, director of the Institute of Foreign Trade of the National Development and Reform Commission.

"China's reforms, including exchange rate reform, should be independent of other countries," he said.

He noted China's currency policy should comply with the country's macroeconomic conditions and industry restructuring. As many exporters' sales were just starting to pick-up, a rising renminbi would hurt their fragile recovery.

Many foreign experts also agreed that the appreciation of the renminbi would not remedy the global economic imbalance.

A 20 percent rise in the yuan and other major Asian currencies would at best lead to a rise in US exports worth 1 percent of gross domestic product, as the International Monetary Fund (IMF) estimates suggested, said Olivier Blanchard, Economic Counsellor and Director of the Research Department of IMF.

"I think it's very important not to bash China over the RMB. What China should do, and is actually doing, is to decrease its saving rate, thus increase domestic demand, and reorient production to satisfy this higher domestic demand," he said in an interview with Reuters on January 29.

The renminbi has gained around 21 percent since July 2005 when the government delinked the yuan from the US dollar. However, China's trade surplus with its major trading partners did not fall accordingly.

"The exchange rate of renminbi is not the main reason for the Chinese-US trade deficit," Foreign Ministry Spokesman Ma Zhaoxu said Thursday.

"We expect the United States to view bilateral trade issues rationally and to negotiate fairly. Accusation and pressure would not bring a solution," said Ma.