China rejects US charges of currency manipulation Business News Jan 25, 2009, 2:32 GMT Beijing - China's central bank rejected allegations by a senior US official that China is manipulating the exchange rates of its currency, state-run media reported Sunday. Su Ning, vice governor of the People's Bank of China, said the allegation could sidetrack efforts to track the real cause of the financial crisis, Xin- hua news agency reported. 'Also, we should avoid any excuse that might lead to the revitalization of trade protectionism. Because it will do no good to the fight against the crisis, nor will it help the healthy and stable development of the global economy,' Su said. US Treasury Secretary-designate Timothy Geithner made the charge to the Senate Finance Committee last week. 'President Obama, backed by the conclusions of a broad range of economists, believes that China is manipulating its currency,' he wrote, in documents released Thursday. Yi Xianrong, a researcher with the financial research center of the CASS, told Xinhua on Friday if the US labeled China a 'currency manipulator', it would hurt the concerted action of fighting the global financial crisis. It would also hamper the global efforts to shake off an economic slowdown as Sino-US economic ties had become among the world's most important relationships, Yi said. According to China customs statistics, Sino-US trade hit 333.74 billion dollars in 2008, up 10.5 percent year on year. With a 9-per cent growth rate, China contributed more than 20 percent of global economic growth in 2008, while the US remained the world's largest economy, Yi said. Geithner's comments were aimed at testing the Chinese government's response, Zuo Xiaolei, senior analyst with the Beijing-based Galaxy Securities, told Xinhua. Yuan appreciation and the pace of appreciation should not only be decided by trade surplus but also the status of domestic economic development, Zuo said. 'The price advantage of Chinese exports may not be a result of currency issues, but the country's lower costs of labor, resources and land,' she said. In July 2005, China abandoned a decade-old peg to the US dollar and allowed its currency to appreciate by 2.1 percent. Since then, the yuan has strengthened further, rising more than 20 percent against the greenback. --

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