China tries to cool yuan dispute with US

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China on Friday said it was sending an envoy to the United States to try to ease trade frictions as its currency regime comes under fire, but cautioned that pressure from US legislators would complicate talks.

The announcement, and comments by China's commerce ministry, appeared aimed at lowering the temperature in an increasingly heated dispute, with US senators threatening to slap duties on Chinese products if Beijing does not allow the yuan to rise.

"Channels of communication between our two sides are open. All issues of concern to either side can be discussed through these channels," He Ning, head of the commerce ministry's North American division, told a media briefing.

But China gave no indication that it was ready to abandon its commitment to a stable yuan exchange rate and market expectations of an appreciation remained muted.

China said Vice Commerce Minister Zhong Shan will visit the United States from March 24-26 for discussions focused on the "Sino-US trade balance and trade frictions".

But demands by the US Congress that Beijing revalue the yuan, which it has held near 6.83 per dollar since the global credit crunch struck in mid-2008, will stand in the way of dialogue, the commerce ministry's He said.

"This will make the whole situation more complex, imposing an external disturbance on our normal channels of communication. That's a trend that we do not want to see," He said.

Beijing says this currency stability has benefited the global economic recovery. US lawmakers say it is an unfair subsidy for made-in-China goods that has stolen American jobs.

A semi-annual US Treasury report due on April 15 could label China a "currency manipulator", adding to pressure on Beijing and threatening a deepening rift between the world's biggest and third-biggest economies.