Chinese Leader Says Trade Surplus Not Intentional
Tianjin, China (AP) - China's premier said the nation's huge trade surplus is not intentional but offered no measures Monday to defuse rising U.S. pressure over currency controls.
In a speech to a business conference, Wen did not mention the currency dispute or demands by American lawmakers for Beijing to face possible sanctions. Critics say China's yuan is kept undervalued, giving its exporters an unfair advantage and swelling its trade surplus.
"We do not pursue surpluses in trade," Wen said before an audience of about 1,500 business leaders at the meeting of the Geneva-based World Economic Forum.
Tension over trade and currency has risen as American lawmakers face pressure to create jobs ahead of November elections. Analysts say that amid slack U.S. growth, Beijing faces a growing likelihood Congress might enact punitive measures.
Lawmakers are due to hold a hearing in Washington this week. That comes after China reported a $20 billion trade surplus for August -- its second-biggest this year.
On Monday, U.S. Treasury Secretary Timothy Geithner was quoted by The Wall Street Journal as saying Beijing had done "very, very little" to allow the yuan to rise since promising a more flexible exchange rate in June.
"It's very important to us, and I think it's important to China, I think they recognize this, that you need to let it move up over a sustained period of time," Geithner was quoted as saying.
In June, Beijing ended an 18-month-old link between the yuan and the dollar and said it would allow a more flexible exchange rate, but the Chinese currency has risen by less than 1 percent since then, which some U.S. lawmakers say is not enough.
Wen also tried to mollify foreign companies that complain Beijing is trying to squeeze them out of key markets.
He repeated promises that foreign-owned companies in China would be treated as Chinese enterprises under controversial government procurement rules issued last year. The rules are meant to promote Chinese technology industries by favoring domestic producers in purchases of computers and other products. Foreign business groups say the rules are the biggest threat to their access to China's market.
"All foreign-owned businesses in China will receive equal treatment," the premier said.
In an unusual admission of official error, Wen said the dispute was due in part to "not-so-clearly defined policies on our part."