Currency policy

Sander M. Levin, chairman of the Ways and Means Committee under the US House of Representatives, said at Wednesday's hearing that "Congress will take some action against China, if China does not change its currency practices after the G20 meeting and the administration does not respond promptly thereafter".

He said Congress believes China persists in pursuing discriminatory trade and investment policies that benefit it at the expense of other countries like the US.

After witnessing trade deficits in March, China's exports for May rose sharply by almost 50 percent. The rise renewed calls in the US for an appreciation of the yuan, although economists said that will not help US jobs or exports.

"I am worried that the US spends much time on arguing China's exchange rate ... when China appreciated its currency ... nothing happened (in helping reduce US trade deficit)," the Brookings Institution's Barry Bosworth said.

A number of Western politicians have also turned a deaf ear to China's reasoning over the yuan issue, said Lei Yanhua, researcher with the Chinese Academy of International Trade and Economic Cooperation affiliated to the Ministry of Commerce.

"They keep blaming China for political gain," Lei said.

No country can make the rules of the game independently and China will not accept such rules, he said.

"If they want to impose their rules unilaterally on China, it will incur substantial retaliation from the latter."

The G20 world leaders' summit in Toronto later this month is not a suitable venue for discussing the revaluation of the yuan, Foreign Ministry spokesman Qin Gang said on Thursday.

"Discussing the yuan's exchange rate at the G20 is not proper," Qin said.

(China Daily June 18, 2010)