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Chinese leader decries calls to boost currency

By Jaime Florcruz, CNN


(CNN) -- China is bracing for another tough year despite economic growth, but opposes foreign pressure to appreciate the value of its currency, Premier Wen Jiabao said Sunday.

"This is going to be the most complicated year for the economy," Wen said. "We still face a lot of uncertainties."

Wen, who spoke at a news conference after a parliament meeting, said China will keep its currency, the yuan, "basically stable," signaling that it's not heeding calls to boost the value of its currency.

Last week, U.S. President Barack Obama asked China to allow the yuan to appreciate, amplifying complaints that Beijing artificially keeps the yuan undervalued to boost exports.

But Wen decried the calls.

"We oppose the practice of finger-pointing among countries or strong-arm measures to force other countries to appreciate currencies," Wen said.

He said China's "strong efforts" to keep the yuan stable have played an important role in the global economic recovery.

Wen warned that the United States disrupted its relations with China when the Obama administration decided to sell weapons to Taiwan and welcome the Dalai Lama to the White House.

Washington in January announced the sale of $6.4 billion of weapons to Taiwan, which China regards as a renegade province.

Weeks later, Obama met the Tibetan spiritual leader, prompting protests from Beijing and souring relations.

"These moves violated China's sovereignty," Wen said. "The responsibility lies on the U.S. side, not on China's side."

The premier also addressed stability and security of the U.S. Treasurys that China holds.

"In the press conference last year, I said I was a bit concerned about it," he said. "This year, I make the same remark. I am still concerned. I hope the U.S. will take concrete measures to assure its investors."

China responded quickly after the 2008 economic downturn by launching a 4 trillion yuan, or $586 billion, stimulus package to boost domestic demand and make up for the shrinking exports.

In recent months, Beijing has seen an economic rebound and GDP growth beat expectations last year by topping 8 percent. Wen said the focus will be on consolidating gains while trying to avoid "double dip" and overheating.

China's inflation rate hovers around 3 percent, Wen said, and China is alert over fears of economic overheating and asset bubbles.

Wen added that Beijing policies are open to businesses.

"We welcome foreign businesses to come to China to open businesses according to the law," he said. "We will vigorously bring in foreign capital and give high priority to advanced foreign technology and managerial expertise."

The premier said he supports free trade because it promotes global economy and harmony.

However, "trade protectionism has gotten worse," he said, and urged the United States and the European Union to lift restrictions on exports of certain technology to China. To top of page

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