BEIJING (AP) -- China's commerce minister, a key defender of the country's exchange rate policies, warned Wednesday that a stronger Chinese currency would have a global impact.
Chen Deming's comments came as the U.S. government is pushing China to allow its currency, the yuan, to rise against the dollar as a way of making Chinese exports less competitive.
Asked about risks associated with a rising yuan, Chen said the issue wasn't simply a matter of commerce with the United States, which he said accounted for just 19 percent of China's overseas trade.
Yuan appreciation "would have an impact on the entire world because we don't just trade with one country, we trade with lots of countries," Chen said.
Critics say the yuan is deliberately undervalued by as much as 40 percent, making Chinese exports cheaper and inflating the country's trade surplus.
Despite Chen's comments and similar sentiments expressed in state media, China is giving signs it might raise the value of the yuan to ease strains on its fast-growing economy.
Many economists say a sharp increase in the yuan's value could boost U.S. exports and create jobs. A stronger currency could also help China's leaders achieve their goal of making the economy more self-sustaining by boosting consumer buying power and reducing dependence on exports and investment.
But most analysts expect that if China does allow its currency to rise in value, it will do so at a slow pace. While Beijing needs to shield its exporters, most of which operate on razor-thin profit margins, it also doesn't wish to be seen by the public as having been pressured into taking such a step by Washington.
President Barack Obama vowed last month to "get much tougher" in trade disputes with China and to press for an end to currency regimes that depress exports and put U.S. companies at a disadvantage. The U.S. Treasury has the option of declaring Beijing a currency manipulator in a report due out in April, which could set the stage for a complaint to the World Trade Organization and possible sanctions on Chinese goods.
The currency dispute is sure to be among the top issues discussed at a high-level bilateral forum scheduled for late May in Beijing.
Chen said he looked forward to talking through the issue at that meeting.
"I hope there is more time to talk so that everyone can get a better understanding," he said.
