Accusation unreasonable

Ma Zhaoxu's remarks were echoed by some analysts as they said the main reason for the enormous trade gap, instead of the exchange rate, was the US restriction on high-tech exports to China.

"Although there's a massive demand in China for technology and industrial equipment amid its industrialization drive, this is ignored by the US," said Zhao Jinpin, Deputy Director of the Foreign Economic Relations Department of Development Research Center under the State Council, China's cabinet.

The US limitation could date back to the United States Policy Regarding Trade with China in 1949, also known as NSC 41.

During the Cold War, the restricted items for exports to China more than doubled compared to those to the Soviet Union.

Only 8 percent of China's high-tech imports were from the United States, sharply down from 18.3 percent in 2001 because of the policy limitation.

In 2007, US Department of Commerce unveiled a new export control regulation, known as China Rule, imposing additional licensing requirements for exports on high-tech products in 31 entries to China, including aircraft and aircraft engines, avionics and inertial navigation systems and high performance computers.

Zuo Xiaolei, chief economist of the China Galaxy Securities, said the international trade balance should be based on the nations' comparative advantage. High-tech products were the US's strength, and the export limitation was not fair.

Zhang Yansheng said a stable yuan was a necessary measure to get through the crisis.

As Chinese leaders have repeated on various occasions that a stable renminbi is what China contributed to the world in times of crisis.

Zhang Yansheng said it seemed China was caught in a dilemma. "If China lets the yuan weaken to shore up exports, it is called 'irresponsible'; However, if it did not do so, it is accused of 'manipulating' the currency. It is really vexing problem."

Nobel Prize Winner Andrew Michael Spence has noted in an article on the Financial Times that "the west is wrong to obsess about the renminbi".

"The singular focus on the exchange rate appears based on the assumption that it is the key cause of the surplus and the main policy instrument for removing it. The reality is more complex. Exchange rate appreciation by itself will not get rid of the trade surplus." he said.

"China will allow its currency to rise in the long run. But it is China to say when, not the United States," Zhang Yansheng said.

(Xinhua News Agency February 9, 2010)