China took a defensive stand on its currency policy Saturday, and dismissed claims from members of the US Congress that Beijing is manipulating the yuan to prop up cheaper Chinese exports, resulting to massive job losses and factory closures in the United States.

Faced with a mounting trade deficit and election pressures, US lawmakers vowed to initiate legislative measures against China over its currency policy, which it deemed unfair and disadvantageous for their bilateral trade.

The lawmakers urged Commerce Secretary Gary Locke, to rule on "whether Beijing's currency policy provided an unfair subsidy for Chinese paper products that should be remedied through trade measures."

However, Chinese commerce ministry spokesman Yao Jian cautioned that pressuring China through trade measures could trample on international trade rules, adding that the World Trade Organisation (WTO) only deals with trade policies and does not regulate financial or foreign exchange policies."

Also, Mr Yao has emphasised that the yuan issue is not within the remit of WTO.

US Treasury Secretary Timothy Geithner told media on Thursday last week that China's rejection of revaluing the yuan could hurt global economic reforms as he faced criticism for holding off a Treasury report due in Congress last April, accusing Beijing of currency manipulation.

China has maintained that a policy shift on its currency would not necessarily address the US trade deficit as it argued that its government has been doing its share of bolstering the global recovery by allowing more imports to enter the country.

Latest trade data furnished by the United States showed that US deficit with China jumped by 14.3 percent to $US19.3 billion in April this year, though still way below from the gargantuan $US227 billion deficit posted last year.

Since the onset of the global financial crisis in 2008, China has effectively pegged the yuan to about 6.8 to the dollar.