In an annual news conference Sunday
that took direct aim at the United States, Chinese Premier Wen Jiabao defended
his country’s currency policy and said it was up to Washington to mend
Rejecting charges that China kept
the yuan artificially low to boost its exports, Wen said the Chinese currency
was not undervalued and that the government’s policy of controlling the
exchange rate had boosted imports and helped spur economic recovery across the
President Obama on Thursday called
on Beijing to move to “a more market-oriented exchange rate.” But Wen
gave no hint that the yuan would appreciate. He instead promised to keep the
currency “stable” and at a “balanced level” while accusing
the U.S. of protectionist trade policy.
Liu Baocheng, a professor at the
University of International Business and Economics in Beijing, said Wen’s
comments reflected the concerns and interests of local governments and
manufacturers who are lobbying to bolster employment and profits.
“China is under domestic
pressure to maintain export momentum and also stabilize the currency,” Liu
said. “There’s a general outcry for the government to be stronger on
international pressure, especially under the financial crisis.”
Wen’s remarks on currency in the
face of growing international demands set the tone for the two-hour, 15-minute
session with reporters in which the Chinese premier admonished the US for
hosting the Dalai Lama and selling arms to Taiwan.
Wen said Washington had violated
China’s sovereignty and territorial integrity, and he challenged American
leaders to improve ties between the two countries.
“These have seriously
disrupted Sino-US relations,” Wen said. “The responsibility does not
lie with the Chinese side but with the United States.”
The Chinese leader expressed
concern for China’s vast holdings of US assets because of the dollar’s depreciation.
“Some countries’ moves to
shore up exports are understandable,” he said. “But what I cannot
understand is they devaluate their own currencies while on the contrary push
for the appreciation of others’ currencies. I think it is protectionism.”
The conference, broadcast live on
state television from the Great Hall of the People, allowed the premier to
articulate how China sees its role as a growing player on the world stage.
Wen rebuffed international
criticism that China had become arrogant and was engaging in triumphalism —
charges that were largely flung after the Copenhagen climate-change talks ended
without a binding agreement. Wen painted the world’s most populous nation as a
country marching toward development against major odds.
Citing the yawning income gap
between urban and rural residents and China’s unbalanced economy, Wen said the
government had too many domestic issues to address to focus on influencing affairs
overseas. China, he said, would always be a passive nation.
“China will never seek hegemony,”
The premier was asked about the
souring business environment for foreign companies in light of Google’s
high-profile threat to leave China and the arrest of employees of the
Australian mining giant Rio Tinto last year. He said that China would create a
“fair playing ground.”
Wen said China wanted more foreign
companies to build research-and-development centres and introduce advanced technology.
He also said he would begin meeting with the foreign business community.
The press conference closed out
China’s 10-day annual legislative session and represented a rare opportunity
for foreign and domestic journalists to speak to the premier.