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Monday, April 25, 2005

China Rejects U.S. Pressure for Early Relaxation of Currency Controls, Criticizes U.S. Trade Deficit

China Rejects U.S. Pressure for Early Relaxation of Currency Controls, Criticizes U.S. Trade DeficitChina Rejects U.S. Pressure for Early Relaxation of Currency Controls, Criticizes U.S. Trade Deficit
The Associated Press
Published: Apr 24, 2005

BEIJING (AP) - A Chinese official rejected U.S. pressure for an early end to China's currency controls and said Washington should take action on its own soaring trade deficits instead of blaming other countries for its economic woes.

The comments Sunday by an official of China's foreign exchange regulator came after President Bush and other officials called on Beijing last week to end its policy of tying the value of its currency, the yuan, to the U.S. dollar.

The United States and other nations say Beijing's fixed exchange rate for its currency, the yuan, is too low and gives China's exporters an unfair price advantage.

"This we cannot accept. I say this in a very blunt manner," said Wei Benhua, vice director of the State Administration of Foreign Exchange, speaking at a gathering of Asian business and political leaders in southern China.

"I made it clear to them: this is your problem. You should put your own house in order before you blame your neighbors," said Wei, referring to a recent meeting with U.S. counterparts.

For the first two months of this year, the U.S. trade deficit was running at an annual rate of $717.2 billion - a full $100 billion above the record imbalance of $617.1 billion in 2004.

Chinese leaders say they plan to let the yuan trade freely on world markets eventually, but they say doing so immediately would damage the country's frail banks and financial industries.

"China has no time schedule for the reform," the official Xinhua News Agency quoted Wei as saying. The government "cannot decide a proper time until the basic conditions mature."

Wei blamed the U.S. trade deficit on "a flawed US economic policy" and said China would make currency decisions based on its own economic needs, the reports said.

AP-ES-04-24-05 2220EDT

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