- The Washington Times - Monday, October 10, 2011

BEIJING | China will again raise the issue of U.S. arms sales to Taiwan when the two sides hold a high-level meeting Tuesday, and it also issued a blunter warning against a proposed law to punish countries with undervalued currencies.

Chinese Vice Foreign Minister Cui Tiankai said Monday that he will express China’s strong displeasure about arms sales to Taiwan when he meets Assistant Secretary of State for East Asian and Pacific Affairs Kurt Campbell.

“The United States has time and again sold weapons to Taiwan. So, of course, we will have to express our stern opposition,” Mr. Cui told reporters at a briefing on the meetings.

However, Mr. Cui also appeared to indicate that China wants to move on from the matter and didn’t want it to sour the overall mood for the talks.

“By putting these issues on the table tomorrow, we hope to better address these issues and prevent them from excessively interfering in the normal development of China-U.S. relations,” he said.

China has said that last month’s announcement of a $5.85 billion arms package for Taiwan would hurt relations with the U.S., and that it would suspend some military-to-military contacts with the Pentagon in response.

Elements of the powerful military and hard-line nationalists have demanded stronger steps, including economic retaliation against military contractors involved in the Taiwan deal.

The U.S., which is obligated by law to ensure Taiwan has the means to defend itself, says it merely was responding to a long-standing request from the island’s democratically elected government.

Mr. Cui also said that a proposed U.S. law to punish countries with artificially low currencies could result in a trade war. China’s central bank issued a similar warning last week, but Mr. Cui’s comments came with a tougher tone.

U.S. senators voted last week to open debate on a bill that would allow the government to impose additional duties on products from countries that subsidize exports by undervaluing their currencies.

“This bill in no way represents the reality of the economic and trade relationship between China and the United States and might have an adverse impact on the development of the commercial relationship,” Mr. Cui said.

“Should the proposed legislation become law, the only result would be a trade war between China and the United States, and that would be a lose-lose situation for both sides,” he said.

The Chinese yuan has appreciated by more than 20 percent against the dollar since China began allowing it to trade within a narrow daily band in 2005.

However, Beijing has rejected calls for it to strengthen more quickly, and economists are divided on how much it remains undervalued as well as the exchange rate’s role in easing China’s massive trade surplus with the U.S.

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