Economy

Yuan appreciation can't redress trade imbalance

(Xinhua)
Updated: 2010-03-30 21:19

BEIJING - The United States' controls on exports to China have exacerbated the bilateral trade imbalance, and yuan appreciation will not solve the problem, China's Commerce Minister Chen Deming said Tuesday.

Chen was commenting on the yuan exchange rate issue for the second time since US lawmakers called on the Obama administration to step up pressure on China to let yuan strengthen.

"It has been proved both in theory and practice that the appreciation of a nation's currency provides little help for improving balance of payments," Chen said in a bylined article posted on the ministry website.

Last week, Chen said at a forum that the yuan was not undervalued, and pressure for appreciation was "irrational" and would bring no good to either side.

The United States had practiced export controls against China for many years, forcing many Chinese purchasers away from the US, which exacerbated the trade imbalance, Chen said.

Chen said US products accounted for 7.5 percent of China's high technology imports last year, down from 18.3 percent in 2001 because of the export control policy.

"If the share in 2001 is used as a benchmark, US companies lost at least 33 billion US dollars worth of export opportunities in 2009," he said.

China was willing to take concerted efforts with the United States to extend cooperation into new areas and encourage imports from US companies, the minister said.

Chen urged the two sides to avoid confrontation, saying "a peaceful China-US relationship makes both countries winners while a confrontational one makes both losers."