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China responds to US criticism

By Le Tian (China Daily)
Updated: 2006-03-22 05:58

Beijing urged Washington yesterday not to politicize the trade frictions between the two countries and hit back at a White House security report that criticized China's military build-up and trade policies.

In talks with the visiting US senators Charles Schumer, a New York Democrat, and Lindsey Graham, a South Carolina Republican, Foreign Minister Li Zhaoxing said trade frictions should be resolved through negotiations on the basis of co-operation.

"We hope the US side will not politicize these issues and magnify them," Li was quoted by Foreign Ministry spokesman Qin Gang as saying at a regular news briefing yesterday.

According to the spokesman, Li briefed the US lawmakers on China's trade and exchange rate policies and said both sides should hold a strategic perspective in handling the bilateral relations.

The two US lawmakers, accompanied by Oklahoma Republican Tom Coburn, arrived in Beijing on Monday to push China to revalue its currency.

They were reported to have carried a warning that Beijing must undertake decisive reform of its currency regime to avoid the hefty tariff of 27.5 per cent on its US-bound exports that could be set by a US Congress vote on March 31.

However, Premier Wen Jiabao has previously appeared to rule out any more reforms to the yuan exchange rate.

"It is no longer necessary for us to take one-off administrative means to affect the fluctuation of the Renminbi exchange rate either upwards or downwards," Wen told a news conference last week. "There will be no more surprises."

China revalued the yuan by 2.1 per cent against the US dollar in July last year, scrapping its 11-year-old peg of about 8.28 yuan to the dollar in favour of a link to a basket of currencies.

In responding to Washington's criticism on China's increase in military spending outlined in a National Security Strategy report that was released last week, Qin said the remarks were "irresponsible and harmed bilateral relations".

"We ask the US side to stop releasing remarks that are harmful to the healthy development of the Sino-US relations, to mutual understanding and to regional peace, stability and development," Qin said.

The White House report said China was expanding its military without transparency, but Qin characterized Beijing's military policy as "defensive in nature."

The US report also expressed concern about China's trade tactics, saying Beijing was seeking to direct markets rather than opening them up. Qin said China conducts economic and energy co-operation with other countries on the basis of equality and mutual benefit.

Analysts say raising complaints now may be part of a strategy of laying controversial issues on the table before President Hu Jintao's visit to the US next month.

While trying to engage China economically and on the international stage, Washington is also making moves to hedge against the nation's military power, an expert on China-US relations from Peking University said in an interview.

"Personally, I think the basic tone in Beijing is that we can only do what we can," said the expert who only gave his surname, Zhu. "We can't sacrifice national interest just for concerns in the United States."

(China Daily 03/22/2006 page2)