China hit back at international pressure to reform its currency today with a top central banker saying it was unfair to make developing countries do most of the work to address global imbalances.
Peoples Bank of China Assistant Governor Ma Delun said China did intend to let its currency move more freely, but was preparing for the reforms at its own pace, and lashed out at what he called politically motivated pressure.
In a speech to an IMF-Bundesbank conference, Ma said China - and other developing Asian countries - had paid the price of exchange rate fluctuations in the world's major reserve currencies, the US dollar and now the euro. He said it was not constructive for the International Monetary Fund to put so much emphasis on the need to increase exchange rate flexibility when volatility in reserve currencies was putting financial stability at risk.
"Some people with possible political motivation neither examine the negative impact of the US imbalanced macroeconomic policy, nor do they think about whether the induced depreciation of the US dollar can be regarded as competitive depreciation," he said in his speech.
"Rather they have been asking some developing countries to shoulder the burden of adjustment of global imbalances. This is quite irrational." The Group of Seven top industrial countries, who control the IMF, has for several years been calling upon China to loosen its fixed exchange rate regime.
The Chinese yuan is pegged at about 8.28 to the US dollar. The US Treasury has warned China it risks trade sanctions within six months unless it pushes up the value of the yuan.