REFILE-UPDATE 1-China tells U.S. not to make yuan a scapegoat

(Refiles to fix graphic)

* China says not fair to judge yuan based on trade surplus

* Says Japan has no right to criticise yuan policy

* China to push ahead yuan reform as a “responsible country”
(Adds quotes and details)

BEIJING, Oct 15 (BestGrowthStock) – The United States should not make
the yuan (CNY=CFXS: ) a scapegoat for its own domestic problems, a
Chinese commerce ministry spokesman said on Friday.

Speaking hours before the United States faces a decision
about whether to formally label Beijing a currency manipulator,
Yao Jian said it was not fair to criticise the yuan’s exchange
rate simply by pointing at China’s export strength.

“It is entirely wrong for the United States to make an issue
of China’s trade surplus and hence put pressure on the yuan
exchange rate,” Yao said at a regular ministry briefing.

China’s trade surplus narrowed a touch in September but has
recovered from the depths of the global financial crisis to
average more than $20 billion a month for nearly half a year.
Already the world’s biggest exporter, China has been expanding
its international market share, making its managed exchange rate
regime an easy target for critics.

“Other countries have no right to comment on what is a
reasonable level for a country’s trade surplus,” Yao added.

A smaller Chinese trade surplus is seen by many economists as
an essential component of the rebalancing that is needed to put
the global economy on sounder footing.

Yao also singled out Japan, saying that it has no grounds to
criticise the yuan.

“Japan is not the right country to say that. It has run a
trade surplus against China for eight consecutive years,” he
said.

Japanese Finance Minister Yoshihiko Noda said this week that
the pace of yuan reform had been too slow.

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For a PDF report “Currencies: Race to the Bottom”

http://r.reuters.com/gez77p

Currency stand-off ahead of G20 [ID:nLDE69308R]

Graphic of global currency pairings at heart of political

tensions http://r.reuters.com/jec96p

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Yao said that China was a responsible country and would push
ahead with currency reform based on its own domestic conditions.

The yuan (CNY=CFXS: ) has appreciated about 2.7 percent since
the central bank announced its depegging from the dollar on June
19.

Analysts expected that with political pressure before U.S.
Congressional mid-term elections in early November and a G20
summit in Seoul in mid-November, the central bank is likely to
continue to allow the yuan to appreciate in the near term.

Yao reiterated Beijing’s long-standing stance that currency
reform would be gradual, arguing that a sharp rise would hit
Chinese exporters.

“If the yuan’s exchange rate rises by 3 percent, it will put
great pressure on some Chinese exporters,” Yao told reporters at
the sideline of the briefing.

But he also sounded an optimistic note about the impact of
yuan reform on most Chinese exporters.

“About 85 percent of export enterprises are private
businesses or owned by foreign companies, and are quite able to
adjust their product structure when facing exchange rate
fluctuations,” he said
(Reporting by Aileen Wang and Simon Rabinovitch; Editing by
Jacqueline Wong and Ken Wills)

REFILE-UPDATE 1-China tells U.S. not to make yuan a scapegoat