China central bank adviser says no to yuan pressure: Report

BEIJING: An adviser to China's central bank said on Sunday that unlike Japan in the 1980s, Beijing would not cave in to foreign pressure to let its exchange rate appreciate, a financial news website said.

Li Daokui's comments come after US Treasury Secretary Timothy Geithner called for Beijing to address trade distortions by letting the yuan strengthen.

"China as it stands now is not Japan in 1985, it is not a country that completely relies on external demand," he said at the China CEO Forum taking place in Beijing, in a speech transcribed on finance.qq.com.

"We will not appreciate the yuan solely because of external pressure."

Li appeared to refer to the 1985 Plaza Accord, where Japan agreed to let its yen currency appreciate against the dollar.

China pledged in June to loosen its grip on its currency, but Geithner said Thursday that despite the move, the yuan's value was "essentially" unchanged in the past two years because of "very substantial" intervention by authorities.

Since June the yuan has appreciated about 1.6 per cent against the greenback and gained about 0.7 per cent this week ahead of Geithner's testimony to Congress.

Critics accuse Beijing of keeping its currency -- and thereby its exports -- artificially cheap, which it denies.

Li said this kind of pressure would not abate in the coming decade.

"Protectionism against China and India will continue to increase and pressure on the RMB currency will also continue," he said, according to the transcript.