China on Tuesday stuck to its guns on the pace of exchange rate reform, reaffirming that change must remain gradual and controllable.
China's trading partners are anxious for Beijing to spell out how quickly it will let the yuan rise after it said on Saturday that it was ending the currency's 23-month-old peg to the dollar.
Some leaders at this weekend's Group of 20 summit in Toronto might even want China to produce a schedule of sorts, Canadian Finance Minister Jim Flaherty said on Monday.
But Foreign Ministry spokesman Qin Gang said Beijing would act as it saw fit and would not be rushed.
I want to stress that we will adhere to further reforming the renminbi's exchange rate formation mechanism following the principles of maintaining initiative, controllability and gradualness, enhancing the elasticity of the exchange rate. This direction will remain unchanged, he told a regular briefing.
The yuan, also known as the renminbi (RMB), fell back on Tuesday as the authorities made good on their promise to create two-way movement in an exchange rate that many economists believe is headed inexorably higher in the long run.
Qin did not give a direct answer when asked whether President Hu Jintao would discuss the yuan in Toronto, but he noted that previous G20 summits had not singled out individual currencies.
This summit is taking place when the global economy is mounting a steady recovery and basically reviving, but that recovery remains unsteady and uneven. So the pressing task for G20 members is to discuss how to enhance communication and cooperation, he said.
As such, the imperative for leaders in Toronto should be to demonstrate a determination to overcome adversity together. They should not engage in mutual accusations and pressure, he said.
The greatest pressure on China is being exerted by some U.S. lawmakers, including Democratic Senator Charles Schumer, who are threatening punitive measures against imports from China.
They are demanding that China let the yuan rise sharply to correct what they see as an artificial undervaluation that hands the country's exporters an unfair advantage in global markets.
But Chen Ping, a professor at the China Center for Economic Research of Peking University, said Beijing should keep the yuan pegged to the dollar to minimize currency risks for exporters.
He called Saturday's announcement of greater exchange rate flexibility a form of passive defense by Beijing to fend off U.S. pressure at the G20 and said disputes over the currency were likely to continue in the absence of a big shift.
The Americans will say the Chinese are dishonest and point out that there has been only a declaration of intent to float the exchange rate but no change in reality, Chen told an academic seminar.
(Reporting by Chris Buckley and Aileen Wang; Editing by Alan Wheatley and Chris Lewis)