China seen cool on U.S. trade-for-yuan deal

* China to let yuan appreciate for its own reasons

* Looking to get high-tech goods from Europe if not U.S.

By Kevin Yao and Langi Chiang

BEIJING, Jan 13 (BestGrowthStock) – China will cast a sceptical
eye over a U.S. offer to free up trade in high-tech goods and
will refuse to be drawn into a bargain to speed up
appreciation of its yuan currency, Chinese government advisers
and economists said on Thursday.

U.S. Treasury Secretary Timothy Geithner said on Wednesday
that Washington was “willing to make progress” in giving China
greater access to the American market and high-tech goods,
provided that it saw some give from Beijing on its tightly
controlled exchange rate regime. [ID:nN12191046]

Chinese officials declined to comment on Geithner’s idea,
made ahead of Chinese President Hu Jintao’s visit next week to
the United States, but a series of advisers and analysts said
that it was unlikely to jump at a trade-for-currency deal.

“China has never thought about yuan appreciation from such
a perspective,” said Ding Yifan, deputy head of the World
Institute in the Development Research Centre, a think-tank
under the State Council, or cabinet.

“The Chinese yuan will not rise in a way designed by the
United States. Yuan appreciation is a general trend. It is not
because the United States wants it,” he said.

The pilfering of U.S. intellectual property is the main
reason for the curbs on exports of high-technology products
that China consistently demands Washington remove.

Washington may, in fact, be too slow in opening the door
to American technology, said Tao Xie, an expert on U.S.-China
relations at the Beijing Foreign Studies University.

He noted that a parade of top Chinese officials had
visited Western Europe in recent months and appeared to be
making inroads there in gaining access to high-tech goods.

“That means we may not need to make major concessions to
Washington about the currency,” he said. “If China can get the
same level of technology and equipment from Western Europe,
why should it bother with the United States?”

China has guided the yuan up by 0.4 percent against the
dollar this week, following a well-established pattern of
nudging up the currency’s value before important political
meetings.

With China’s trade surplus hitting nearly $200 billion
last year and inflation running at its fastest in more than
two years, economists believe that more yuan appreciation is
needed over the coming year. [ID:nSLABCE7MO]

“We know that the government has pledged to put the task
of fighting inflation at the top of its agenda this year,”
said Lu Zhengwei, senior economist at Industrial Bank in
Shanghai.

“As more and more Chinese households own cars, the impact
from higher international crude oil on inflation expectations
has increased sharply. I think this is the most important
factor behind the sharp appreciation in recent days,” he said.
(Writing by Simon Rabinovitch; Editing by Kim Coghill)