China’s Foreign Ministry says G-20 is wrong forum for yuan exchange rate discussion

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China says G-20 wrong place to discuss yuan issue

BEIJING — China’s President Hu Jintao will attend next week’s G-20 meeting in Toronto but does not want to discuss China’s exchange rate policy, the government said Thursday.

Foreign Ministry spokesman Qin Gang said the summit should stay focused on ways to accelerate recovery from the global financial crisis.

“We believe it would be inappropriate to discuss the renminbi exchange rate issue in the context of the G-20 meeting,” Qin told a regular news briefing, referring to the Chinese currency, which is also known as the yuan.

Qin said China expects the G-20 talks will mainly focus instead on the European Union debt crisis and ways countries can cooperate to speed up the global economic recovery.

He also defended China’s management of its currency. American manufacturers contend that the Chinese currency is undervalued by as much as 40 percent against the dollar. That means that Chinese products are cheaper for U.S. consumers but American goods cost more in the Chinese market.

Qin, however, said Beijing worked hard to keep the yuan stable through the financial crisis, saying that was a major benefit to the international community and that the Chinese currency policy posed no obstacle to global economic growth.

He said Beijing was opposed to others politicizing the issue or pressuring China to address it. China will pursue the “controlled and gradual” reform of its exchange rate mechanism, he said.

“As to the when and how, this will be decided in line with the global economic situation and China’s own development trends,” he said.

China did allow its currency to rise in value from July 2005 until the summer of 2008 by about 20 percent but then abruptly halted the rise when the global economic downturn began amid concern that a stronger yuan would hurt its exports.