Sunday, November 2, 2008

China Hits Out At Obama Claims On Currency Manipulation

BEIJING (AFP), Dow Jones Newswires - October 30, 2008

China hit out Thursday at claims made by U.S. presidential candidate Barack Obama that its huge trade surplus with the U.S. was related to its manipulation of its currency.

"The yuan exchange rate is not the cause of the U.S. trade deficit," foreign ministry spokeswoman Jiang Yu said in response to a question on how China viewed Obama's remarks.

"I hope that the U.S. can expand its exports to China and reduce barriers for trade and investment. We believe this will help the U.S. reduce its trade deficit."

In a letter to the U.S. National Council of Textile Organizations published Wednesday, Obama called for China to change its foreign exchange policies to rely less on exports and more on domestic demand for growth.

"The massive current account surpluses accumulated by China are directly related to its manipulation of its currency's value," Obama said in the letter, published on the council's Web site.

"The result is a large imbalance that is not good for the United States, not good for the global economy and likely to create problems in China itself.

"China must change its policies, including its foreign exchange policies, so that it relies less on exports and more on domestic demand for its growth."

Jiang, however, refused to comment specifically on Obama, giving no indication as to whom the Chinese government favored out of the Democratic candidate or Republican nominee John McCain.

"The U.S. presidential elections are the internal affairs of the United States," she said.

"We believe that whoever wins this election will attach importance to U.S. relations with China."

Both Obama and McCain have focused mainly on the global financial crisis and said little about their policies towards China.