China urges Obama to respect free trade, defends currency policy
AFP - Friday, November 7
BEIJING (AFP) - - China said Thursday it hoped the United States would adhere to free trade under Barack Obama, while defending exchange rate policies criticised by the president-elect during his campaign.
"We will continue to follow a mutually beneficial foreign policy, we believe in free trade, and we believe America also believes in free trade," foreign ministry spokesman Qin Gang said.
"We hope that the policy of free trade will continue to be adhered to. We must prevent trade protectionism, which is no good for either side," he said, when asked if he thought Obama would be more protectionist.
Obama, who won the US presidential election Tuesday, said during his campaign that China's huge trade surplus with the United States was related to its manipulation of its currency.
In a letter to the US National Council of Textile Organisations published last month, Obama called for China to change its foreign exchange policies to rely less on exports and more on domestic demand for growth.
"Some people in America think the trade imbalance between China and America is caused by the yuan exchange rate, but as a matter of fact, I believe we should have a correct understanding of trade between China and the US," Qin said.
"We admit there's a trade imbalance between China and the US... but you cannot put the blame on China. It's the result of the division of labour against the backdrop of economic globalisation."
China's currency was pegged to the US dollar until 2005, when it was allowed to gradually rise against the greenback. Since April, however, it has moved very little from about 6.85 to the dollar.
"We have taken a series of actions to tackle this issue. For example, the yuan exchange rate is not rigid. As you can see in the past few years, the exchange rate has been rising," Qin said.
Qin reiterated China's argument that the United States could reduce the deficit by lifting restrictions on high-tech exports.
"We'd like to also introduce more products from the United States, especially those high-tech products," he said.
"We hope the United States can lift commercial restrictions on high-tech products. It could contribute to balanced trade between the two countries."
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