China downplays yuan issue with Brazil

China on Monday dampened Brazil's expectations to discuss the yuan's impact on bilateral trade during President Dilma Rousseff's visit to Beijing next month, saying it wasn't an important issue.

Brazilian government officials have said they want to discuss the issue of the cheap yuan, which has helped fuel a flood of Chinese imports and deteriorated Brazil's trade balance.

"This will not be an important theme, it is not an issue between Brazil and China," Qiu Xiaoqi, China's ambassador to Brazil, told a news conference.

China would continue a gradual, controlled and sovereign currency reform, which benefited the Chinese and world economy, he said.

"We won't do anything under political pressure," Qiu said when asked about Brazil's position on the yuan.

Rousseff, who has pledged to get tough on trade since she took office on January 1, will meet with China's President Hu Jintao on April 12.

Still, Qiu held out the possibility that China could diversify its trade with Brazil and possibly include more value-added products, another major issue on the agenda Rousseff wants to take to Beijing.

"I perfectly understand the Brazilian desire. I am working in search of more balanced trade, in all senses," Qiu said.

The vast majority of Brazilian exports to China are raw materials such as iron ore and soybeans.

Rousseff's "historic" visit to China would produce concrete results as the world's second and seventh-largest economies intensified their trade and investment ties, Qiu said.

China has been investing in Brazil's fast-growing oil industry. It was also studying whether to participate in a tender for a USD 19 billion high-speed railway there, Qiu said.