The morning talks on the sidelines of the annual UN General
Assembly come as US lawmakers appear closer than ever to acting on
long-standing threats to penalize China for keeping its currency artificially
low.
Wen staged a preemptive defense of China’s policies on Wednesday,
flatly rejecting any link between the level of the Chinese yuan, or renminbi,
and US trade deficits.
“The main reason for the US trade deficit with China is not
the renminbi exchange rate, but the structure of trade and investment between
the two countries,” he said in a speech to US executives and China experts in
New York.
Wen’s talk came after a US House of Representatives
committee scheduled a vote for Friday on a China currency bill that would treat
China’s “undervalued” currency as an export subsidy and allow the US Commerce
Department to impose countervailing duties on Chinese products to offset the
undervaluation.
Critics inside and outside Congress say China deliberately
undervalues its currency by as much as 25 percent to 40 percent to give Chinese
companies an unfair trade advantage, hurting US exports and employment.
Obama said on Monday that China had not done enough to raise
the value of the yuan, keeping up Washington’s tough rhetoric on Chinese policy
six weeks before congressional elections that will focus on the US economy and
jobs.
Pushing back against the US pressure, Wen said China, too,
had big job considerations and the 20 percent appreciation of the yuan demanded
by US lawmakers would cause many bankruptcies in the Chinese export sector,
where firms operate on thin margins.
“The conditions for a major appreciation of the renminbi do
not exist,” Wen said, adding the appreciation of China’s currency demanded by
US lawmakers would not bring jobs back to the United States because American
firms no longer make most of labor-intensive products China exports.
Prospects for action in the Senate, which would also have to
approve legislation, are uncertain. Key senators have said time may be too
tight since lawmakers hope to leave Washington in just a few weeks to campaign
ahead of the Nov. 2 elections.
The US Treasury Department said it would “carefully examine”
any proposals put forward by Congress.
But Wen, known in China as the leader dispatched to placate
disgruntled workers or disaster victims, also offered conciliatory remarks in
his speech to the US-China Business Council and National Committee on US-China
Relations.
“I fully believe that all the disputes and friction in
China-US trade at the moment can be resolved,” he said.
He added that China wanted a “strong and stable US, just as
the US needs a strong, stable China” and called for more bilateral
macroeconomic policy coordination to ease imbalances.
