Chinese Premier Wen Jiabao on March 14 spurned foreign calls for the yuan to rise. Wen said calls from the United States and other big economies for China to lift the value of its yuan currency were unhelpful, even protectionist, and vowed that Beijing will steer its own way on currency reform through a risk-filled economic landscape.
The United States, the European Union and others have long been critical of China's yuan regime. Many U.S. lawmakers complain China's currency is undervalued by as much as 40 percent, undercutting the competitiveness of U.S. products.
The risks of deepening economic tensions between Washington and Beijing now hinge on a decision by the Obama administration about whether to call China a "currency manipulator" in a semi-annual Treasury Department report due out on April 15.
Wen made clear that Beijing was in no mood to surrender to any demands from Washington and might even be girding for a fight. "I can understand some countries' desire to raise exports, but what I do not understand is depreciating one's own currency and attempting to pressure others to appreciate, for the purpose of increasing exports. In my view, that is protectionism," he said.
China is the world's biggest holder of U.S. Treasury debt, holding $894.8 billion worth. (Source: Benjamin Kang Lim and Langi Chiang, Reuters, Mar 15, 2010).