Chinese Premier Wen Jiabao denied possibilities for Chinese currency, the yuan or renminbi, to appreciate drastically despite pressures from the U.S. congress members, reports Wall Street Journal.
Premier Wen made the comment during a speech at a welcome banquet by National Committee on U.S.-China Relations and U.S.-China Business Council on Wednesday, saying that the conditions for a major appreciation of the renminbi do not exist and any sharp changes would stir social unrest.
The 20-40 percent appreciation of the yuan demanded by U.S. lawmakers would cause many bankruptcies in the Chinese state-owned enterprises, and cut jobs for urban workers and migrant workers, and eventually bring in fierce social turbulence, Wen said.
The issue of the yuan exchange rate was an economic one and must not be politicized, Wen added.
China has never pursued surplus in trade, and the trade surplus is not to be blamed for the high unemployment rate in the United States, he said.
China would like to work together with the United States to address the trade imbalance between the two countries, Wen said, pledging to continue increasing imports of goods from the United States.
He also underscored that China is a developing country and is facing many economic problems including unemployment.
He said he understood Barack Obama’s efforts to deal with unemployment by pressing the yuan to appreciate, adding the Chinese government is facing much more pressure than its counterpart.