China's Premier Wen says yuan reform to remain gradual

China's exchange rate reform will remain gradual in order to allow businesses to steadily adapt, Chinese Premier Wen Jiabao said on Sunday.

Responding to questions in an online forum, Wen said the government would increase the yuan's exchange rate flexibility in a step-by-step approach. He warned that too rapid an appreciation could hurt social stability. "The development of our socialist path requires us to gradually push forward the yuan exchange rate reform and make the yuan exchange rate more flexible, but we are opposed to politicising the yuan exchange rate issue," Wen said. Beijing has come under pressure as some of China's trade partners, particularly the United States, say the yuan is undervalued, giving Chinese businesses an unfair competitive advantage in global markets.