Beijing Warns Against Trade Sanctions
BEIJING (TheStreet) -- China's commerce minister Sunday delivered a clear warning to the U.S. not to impose trade sanctions as retaliation for Beijing's currency controls.
He also said that China was likely to report a trade deficit for March, meaning the value of its imports would exceed that of its imports.
The U.S. and other countries have been pressing Beijing to relax exchange-rate controls for its currency, known as the yuan or renminbi. Some U.S. lawmakers are demanding that the Treasury Department declare China a currency manipulator in a report due out next month, the
AP
noted.
If the Treasury Department's "reply is accompanied by trade sanctions and trade measures, we will not ignore it," Chinese Commerce Minister Chen Deming said, according to the
AP
. "If it is followed by any international legal lawsuit against China, we will take them on."
Chen's remarks come a week after Chinese Premier Wen Jiabao said the yuan
.
But critics of China's exchange-rate controls contend they undervalue the nation's currency by as much as 40%, giving Chinese exports an unfair advantage.
But on Sunday, Commerce Minister Chen said the controls are not responsible for his nation's trade surplus, the
AP
reported. Instead, he said U.S. restrictions on certain exports to China, including high-tech goods that have military uses, were to blame.
After pegging the value of the yuan to greenback for decades, Beijing allowed its currency to appreciate about 20% from 2005 through late 2008. Since then, however, China has kept its currency steady against the dollar.
Chen said an appreciating currency did little to change trade balances. "Both in theory and in practice, the appreciation of a country's currency has a very limited role in adjusting trade," the
AP
quoted him as saying.
This article was written by a staff member of TheStreet.com.
