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China blasts U.S. congressional report on currency

- Associated Press - Friday, November 19, 2010

BEIJING (AP) — A U.S. congressional report that called on Washington to do more to force China to increase the value of its currency constitutes interference in Beijing's internal affairs, the Chinese Foreign Ministry said Friday.

Ministry spokesman Hong Lei accused the U.S.-China Economic and Security Review Commission of having a "Cold War mentality" and of harboring a grudge against China.

"We urge this so-called commission to stop interfering in China's internal affairs and instead exert greater efforts to build mutual trust and cooperation between China and the U.S.," Mr. Hong said in a statement posted on the ministry's website.

In its annual report issued Wednesday, the commission repeated accusations that China deliberately keeps its currency, the yuan, weak against the dollar to make its exports cheaper, leading to huge trade surpluses with the U.S.

Beijing has repeatedly rejected U.S. accusations that its currency is undervalued, and it contends that a stronger yuan will not ease America's yawning trade deficit. Chinese officials say globalization of production also has contributed to trade imbalances and the United States must solve its problems of unemployment, overspending and low savings.

The politically sensitive imbalance — America's largest with any country — hit a monthly record of $28 billion in August and is running 21 percent higher than in 2009.

The commission said China's ability to sell the United States four times as many goods as it imports from the U.S. is "a major drag" on the American economy.

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