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Sino-U.S. tensions show no sign of easing

2010-03-26 09:08 BJT

Special Report: Yuan Not to Blame for Trade Surplus |

By Li Xiaokun and Ding Qingfen

BEIJING, March 26 -- There are no clear signals of an easing in trade and political tensions in Sino-U.S. relations despite the hope generated by the visits of two Chinese vice-ministers to Washington.

Chinese Vice Commerce Minister Zhong Shan is greeted by an unidentified person while attending the breakfast meeting at the U.S. Chamber of Commerce in Washington, D.C., capital of the United States, March 24, 2010. (Xinhua/Zhang Jun)
Chinese Vice Commerce Minister Zhong Shan is greeted by an unidentified person while
 attending the breakfast meeting at the U.S. Chamber of Commerce in Washington, D.C.,
 capital of the United States, March 24, 2010. (Xinhua/Zhang Jun)

Vice-Commerce Minister Zhong Shan said in the U.S. capital on Wednesday that Beijing will reform its currency regime gradually and keep the exchange rate stable.

Rejecting mounting U.S. calls to allow the yuan to rise more quickly, Zhong said changing the exchange rate was not the way to fix a huge bilateral trade gap, and that it could upset the global economy.

"Revaluing the renminbi is not a good recipe for resolving problems," he told the U.S. Chamber of Commerce.

"It is in nobody's interest - China's, the U.S.' or other countries' - to see big ups in the renminbi or big downs in the dollar," Zhong said.

He asked Washington not to blame others for its own problems, "otherwise, the outcome would just be the opposite."

Zhu Min, deputy governor of the People's Bank of China, the central bank, also said on Thursday that Beijing will refine its exchange rate regime but declined to set a timetable.

U.S. Treasury Secretary Timothy Geithner said it was critical for China to allow its currency to rise.

"We can't force them to make that change," he said in an interview with CNN. "But it is very important that they let it start to appreciate again. And I think many of them understand that," he said.

U.S. Senators are crafting a law that would slap import duties on Chinese goods to offset what they believe is the low value of its currency.

The sponsors of the bill, Democratic Senator Charles Schumer and Republican Senator Lindsey Graham, also want the Barack Obama administration to formally label China a currency manipulator in a semi-annual Treasury Department report due on April 15.