China to U.S.: Currency Bill Would Provoke a Trade War
China has accused the United States of provoking a confrontation that is both costly and unnecessary as Chinese officials called on the U.S. Congress to reconsider its plan of passing a legislation that would dictate on Beijing to allow the appreciation of Yuan.
In a statement posted on China's official government website, Foreign Minister spokesman Ma Zhaoxu characterised the proposed measures as 'politicising' a rather economy issue, which he warned could lead into a trade war being waged by two of the world's biggest economies.
"By using the excuse of a so-called 'currency imbalance', this will escalate the exchange rate issue, adopting a protectionist measure that gravely violates WTO rules and seriously upsets Sino-U.S. trade and economic relations," Reuters reported Ma as saying on the online statement.
He added that Beijing is duty-bound to oppose the legislative initiative being pushed by U.S. lawmakers, that he stressed would only chip away gains on international efforts to reverse the gradual declines of major global economies, specifically those of American and European economies.
On Monday, the U.S. Senate paved the way for a week-long debate on the Currency Exchange Rate Oversight Reform Act of 2011, which when approved will empower U.S. authorities to punish countries that it deems practice unfair trade practices.
U.S. officials have long accused China of manipulating its currency, thus giving it undue advantage on export products it ships to international markets. As of this year, Beijing runs a huge surplus on its trading relations with America.
However, China took the American move as a way of degenerating into 'protectionism' as Ma strongly urged the U.S. Congress "to proceed from the broader picture of Sino-U.S. trade and economic cooperation," when working on its legislative agenda.
At the same time, the Chinese foreign ministry official assured the U.S. and its other trade partners that reforms are underway to strengthen "the flexibility of the renminbi exchange rate."
Also, Chinese Commerce Ministry spokesman Shen Danyang cautioned U.S. officials from implementing policies that are poised to put the blame on other country instead of adapting measures that would correct America's domestic failures.
"Trying to turn domestic disputes onto another country is both unfair and in violation of standard international rules, and China expresses its concern," Shen was quoted by Reuters as saying.