Unchanged stance of stable yuan

Since China leapfrogged Germany to become the world's largest exporter, the country is facing increasing criticism for devaluating the yuan to earn artificial price advantages.

"I don't think the yuan exchange rate is undervalued," Wen told reporters.

In July 2005, China abandoned a decade-old peg to the US dollar and allowed its currency to appreciate by 2.1 percent. Since then, the yuan has strengthened further, rising 21 percent against the US dollar.

Despite pressures for appreciation, China has kept the yuan exchange rate basically stable, which the premier said has helped facilitate the recovery of the global economy from the worst financial crisis in decades.

Wen rejected these pressures, saying "We oppose accusations and even forceful measures that press for yuan appreciation, which will not help the reform."

The premier reiterated China will further improve the yuan exchange rate formation mechanism and keep the yuan exchange rate basically stable at a reasonable and balanced level.

"Some countries' moves to shore up exports are understandable. But what I can not understand is they devaluate their own currencies while on the contrary pushing for the appreciation of others' currencies. I think it is protectionism," he said.

Wen said China will launch new measures to increase imports for balanced international payment and promote free trade, although protectionism worsens as the global financial crisis deepens.

In 2009, China's exports fell 16 percent from a year earlier while imports dropped only 11 percent, leading to a decline of US$102 billion in trade surplus.

With China trying to shift to a more home-demand driven growth, consumption, replacing exports, is contributing more to drive the economy.

Of the 8.7-percent economic growth recorded last year, consumption contributed 4.6 percentage points, investment accounted for 8 percentage points while exports subtracted 3.9 percentage points.

China has become an important export market not only for its neighboring countries, including the Republic of Korea and Japan, but also the European Union and the United States, Wen said.