China rules out major currency moves ahead of Washington talks

BEIJING: Chinese officials on Tuesday ruled out major changes demanded by U.S. lawmakers in Beijing's currency controls ahead of a high-level meeting and called on critics in Congress not to politicize trade disputes. Beijing is making progress in allowing its currency to trade more freely, but acting on U.S. appeals to move more quickly could disrupt the economy, said the officials. They briefed reporters on next week's meeting in Washington on condition they not be identified by name.

"The government will not permit a backlash against financial markets and its 'harmonious society'," said a senior Finance Ministry official, using Beijing's term for efforts to spread China's new prosperity to its poor majority. He said Beijing introduced a more flexible exchange rate system in 2005 and "will not announce it again."

The May 23-24 talks are the second round of a "strategic economic dialogue" led by U.S. Treasury Secretary Henry Paulson and Chinese Vice Premier Wu Yi. They are meant to ease strains over China's swollen trade surplus, currency controls and other disputes that threaten one of the world's biggest trading relationships. The agenda includes opening China's service industries to more foreign investment and competition, energy and the environment, balanced economic development and innovation, the officials said.