updated 5/18/2005 10:50:37 AM ET 2005-05-18T14:50:37

China on Wednesday rejected U.S. pressure for quick action toward revaluing its currency and criticized U.S. and European curbs on surging textile imports as unfair.

China is standing its ground in the high-stakes trade disputes, responding to U.S. and EU pressure by accusing its critics of failing to follow through on their own market-opening pledges.

Europe and the United States dragged their feet on carrying out promises to open markets before a worldwide quota system ended on Jan. 1, Commerce Minister Bo Xilai said Wednesday in comments carried by the official Xinhua News Agency.

That led to a surge of inexpensive Chinese textile exports flooding Western markets this year, he said.

“But now the United States and the EU blame China for such rapid growth, and (have) tried to set restrictions on China’s textile products. It’s unfair,” Bo told a group of international executives attending a conference in Beijing held by the U.S. business magazine Fortune.

Rich countries should not insist that their trading partners open their markets while keeping their own markets closed in fields where they lack a competitive edge, such as textiles, Bo said.

“Such activity is obviously in violation of the WTO principle of ’free and fair trade’,” Bo was quoted as saying.

Officials here have repeatedly warned that moves to limit Chinese exports could undermine confidence in the World Trade Organization, which Beijing joined in late 2001 after pledging potentially painful market opening reforms in many areas, including banking and agriculture.

Washington announced Friday that it would impose quotas on the amounts of Chinese-made cotton trousers, cotton knit shirts and underwear that China can export to the United States.

The European Union has also stepped up pressure on China to control the surge.

EU trade chief Peter Mandelson said Tuesday that production and employment have slumped “dramatically” in the T-shirt and flax yarn industries since the year began. European producers need “a limited but no less important breathing space,” he said.

But Mandelson also assured China that the 25-nation EU does not plan to follow Washington’s lead in reimposing quotas.

Adding to the rancor between Washington and Beijing, the U.S. Treasury Department said in a report Tuesday to the U.S. Congress that China could be cited as a currency manipulator and face economic sanctions unless it moves swiftly to overhaul its currency policies.

That warning drew a blunt rebuff from Beijing. A central bank spokeswoman said Wednesday that China has made clear its determination to set its own timing and course for reforming its tightly controlled currency regime, which keeps the Chinese yuan trading in a narrow band around 8.28 yuan per U.S. dollar.

Premier Wen Jiabao said Monday that China wouldn’t bow to foreign pressure on the issue.

“Premier Wen has already clearly explained it (China’s currency stance) the other day,” the spokeswoman told Dow Jones Newswires. But she did say the central bank was studying the Treasury report.

Critics of China’s foreign exchange controls say Beijing should relax controls over the yuan, contending that its link to the U.S. dollar undervalues it by as much as 40 percent. They say that gives Chinese manufacturers an unfair price advantage and is speeding the loss of U.S. factory jobs.

The Treasury Department report said China’s currency policies were “highly distortionary.” Officials said they would monitor China’s progress toward a more flexible exchange system over the next six months, before their next report.

Meanwhile, a senior official at the State Administration of Foreign Exchange, Wei Benhua, said Wednesday that Washington was “completely wrong” in pushing Beijing to revalue the yuan.

China lacks the expertise and systems to handle a foreign exchange market and its debt laden banks are not ready to compete in an open capital market, Wei said at a trade forum in Singapore.

“It’s clear that there’s no time framework for such a change; the conditions are not ready yet,” he said. But he said China was willing “to work with the U.S. side to take a more cooperative attitude to try to solve this problem.”

© 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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