Chinese premier rejects U.S. call to raise currency

BEIJING — Chinese Premier Wen Jiabao on Sunday lectured the United States, criticizing its call for China to let its currency rise against the dollar to boost U.S. exports, advising it to work harder to improve its financial system and directing it to change its foreign policy to improve relations with China.

Wen's comments — during a news conference at the end of China's annual session of its nonelected legislature — seemed to indicate that China would generally pursue a relatively tough line in its relations with the United States this year.

The comments underscored China's increasing self-confidence on the international scene following its success at coping with the global financial crisis.

But Wen also continued to express caution about the course of domestic events, expressing concern about "the unsteady, uncoordinated and unstable development of the Chinese economy." China grew at 8.7 percent last year, the fastest of any major economy in the world, but it did so on the back of a massive stimulus package.

Wen's statements on the currency issue appeared to close off the possibility that China would allow its currency, the yuan, to appreciate against the dollar anytime soon.

On Thursday, President Obama, in rolling out a plan to increase American exports, called on China to adopt "a more market-oriented exchange rate (that) would make an essential contribution to that global rebalancing effort."

"I understand that some countries want to increase their exports, but I don't understand the practice of depreciating their currency and forcing others to appreciate theirs in order to accomplish this," Wen said. "I think this is a type of trade protectionism."

Theoretically, letting the yuan, or renminbi, appreciate again would make U.S. exports cheaper and thus more popular in China; it also might increase the price of Chinese goods, thereby lowering America's $225 billion trade deficit with China.

U.S. officials have said they hope China will increase the value of the yuan before April 15, when the Treasury Department is scheduled to release a report to determine if China is a "currency manipulator," meaning that it is keeping the value of the yuan artificially low. That could give added impetus in Congress to legislation that would slap tariffs on Chinese imports into the United States.

Wen also directed the United States to "take concrete steps" to improve its financial outlook and protect China's investments in U.S. Treasury bonds. China holds hundreds of billions of dollars in U.S. debt.