China snubbed Japan's suggestion of making its exchange rate more flexible, an indication of rising tensions between the largest economies in Asia.
Spokesman for China’s Ministry of Commerce Yao Jian said in a statement that it is unreasonable for Japan to criticize on the value of yuan, citing the trade surpluses it enjoyed with the country. "China has been acting responsibly on currency policies," he added.
The rebuke came after Japan’s Prime Minister Naoto Kan suggested two days ago that guiding currencies lower is against the “coordination process” of the G-20. He mentioned the names of China and South Korea in that statement and requested them to take "responsible actions." South Korea rebuffed the premier's statement yesterday.
Yao said that Japan has trade surplus ratios with China from 2003 to 2010, although Japan says that it uses different calculation methods that display net trade deficits during these years.
Yao added the yuan shouldn’t be used as a scapegoat for American economic and unemployment problems, giving a strong response to American statements that criticized China for its currency manipulation. U.S. Commerce Department reported a trade deficit with China yesterday, showing an increase of China’s exports to the U.S. at record $35.3 billion, with U.S. exports dropping to $7.3 billion.
Yao made a reference to Japan's fiscal policies in the 1980s that led to financial meltdowns saying, “After those lessons, how could Japan lecture us?”
The Group of 20 nations will meet next week in South Korea to discuss currency devaluation and other matters.
