WASHINGTON- A Chinese official said on Wednesday China would reform its currency policy gradually and keep the exchange rate stable, rejecting US calls for it to rise more quickly. Chinese Vice Commerce Minister Zhong Shan, in Washington at a time of heightened US-China trade and political tensions, told business leaders that changing the exchange rate was not the way to fix a huge bilateral trade imbalance. "Revaluing the renminbi is not a good recipe for solving problems," he told the US Chamber of Commerce, according to a transcript made available by the US business group. A growing number of US economists estimate China's currency is undervalued by up to 40 per cent. They say that gives China an unfair price advantage in international trade, takes jobs away from other countries and adds to global financial distortions. The economists' views on the currency have been taken up by U.S. lawmakers, who are crafting legislation that would slap import duties on Chinese goods to offset the price advantage China enjoys from suppressing the value of its currency. Sponsors of the bipartisan bill want President Barack Obama's administration to formally label China a currency manipulator in a semi-annual Treasury Department report due on April 15. The Obama administration twice rejected that route in 2009, as his Republican predecessor George W. Bush had done. Wary of straining US-China relations, Obama has instead pressed Beijing to move to a "more market-oriented exchange rate". "What seems undisputed ... is that China has a persistent economic strategy, a policy, key to which is the pegging of its currency to the dollar at an undervalued rate," said U.S. House Ways and Means Committee Chairman Sander Levin, an influential Democratic Party lawmaker. "There's no easy answer to the problem. But the answer is not to deny the problem," Levin said. "China's currency policy and export-led growth policy are bad for the rest of the world as well" as the United States, he said at the start of a hearing with experts on Chinese exchange rate policies. But Zhong restated China's rejection of outside pressure on the currency in his talk with business leaders.
