An appreciation of 20 percent in China's currency would cause widespread bankruptcies in China's export sector, where firms operate on thin margins, Chinese Premier Wen Jiabao said on Wednesday.
"The conditions for a major appreciation of the renminbi do not exist," Wen said in a speech to U.S. businessmen in New York. He said the appreciation of China's currency demanded by U.S. lawmakers would not bring jobs back to the United States because U.S. firms no longer make such labor-intensive products.
A House of Representatives committee scheduled a vote for Friday on a China currency bill, and a Democratic aide said the full House was expected to vote on the measure next week.
Critics inside and outside Congress say China deliberately undervalues its currency by as much as 25 percent to 40 percent to give Chinese companies an unfair trade advantage, hurting U.S. exports and job prospects.
Obama said on Monday that China had not done enough to raise the value of the yuan, keeping up Washington's tough rhetoric on Chinese policy as U.S. lawmakers planned legislation to punish Beijing.
"It is time for Congress to pass legislation that will give the administration leverage in its bilateral and multilateral negotiations with the Chinese government," House Speaker Nancy Pelosi said in a statement.
"If China allowed its currency to respond to market forces, it could create a million U.S. manufacturing jobs and cut our trade deficit with China by $100 billion a year, with no cost to the U.S. Treasury."
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