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China opposed to fingerpointing in exchange rate issue: Premier

BEIJING, March 14 (Xinhua) -- Premier Wen Jiabao said Sunday China opposes accusations and even forceful measures that press for yuan appreciation, which will not benefit the exchange rate reform.

"A country's exchange rate policy and its exchange rates should depend on its national economy and economic situation," Wen said while meeting the press after the annual parliament session.

"I don't think the yuan exchange rate is undervalued," Wen said.

The real effective exchange rate of the renminbi, or yuan, has risen by 14.5 percent when the global economy was worst hit between July 2008 and February 2009, he said.

The premier said a stable yuan has played an important role in facilitating the recovery of the global economy from the worst financial crisis in decades.

China, which overtook Germany as the world's biggest exporter at the end of 2009, is under increasing criticism for devaluating the yuan to earn artificial price advantages.

Despite the pressures, the premier said China will further improve the yuan exchange rate formation mechanism and keep the yuan exchange rates basically stable at a reasonable and balanced level.

"Some countries' moves to shore up exports are understandable. But what I can not understand is they devaluate their own currencies while on the contrary pushing for the appreciation of others' currencies. I think it is protectionism," he said.

"We support free trade, as it will not only keep economy flowing like running water, but also bring harmony and peace to people," he said.

Wen said China would step up efforts to boost imports and maintain international payment basically stable.

On March 11, U.S. President Barack Obama unveiled his efforts to double U.S. exports over the next five years and pressed China to appreciate its currency, saying a "market-oriented" exchange rate for yuan is "an essential contribution to that global rebalancing effort."

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