Beijing, May 30:

Millions of Chinese could be thrown out of work if Beijing buckles to foreign pressure to allow its currency to rise sharply, state media on today quoted a new study as saying.

The report by China’s Institute of Labour Science warned that a further yuan appreciation of five to 10 per cent would cost about 3.5 million workers their jobs in non-agriculture sectors, the China Daily newspaper reported.

It also stated about 10 million farmers would be adversely affected. The yuan has already risen by about seven per cent against the US dollar since China loosened some controls on the currency two years ago. But trading partners, especially the US, who are worried about their growing trade deficits with China, continue to press Beijing to allow far greater appreciation so Chinese exports would be more expensive.

The study stated the textile, footwear, toy, apparel and motorcycle sectors would be hit hardest, especially the latter two industries. “These industries are all labour-intensive, relying heavily on exports. Any appreciation will curb exports and wipe out enterprises’ profit margins which are already thin - between three and five per cent,” said You Jun, head of the institute, which is under the Ministry of Labour and Social Security, a co-author of the study.

The five industries provided 24 million jobs in 2004, the report stated. A stronger yuan will also hit the farm sector, especially soybean, cotton, wheat and corn growers, by hindering China’s growing agricultural exports while boosting imports of suddenly cheaper foreign farm products.

“If the yuan rises five to 10 per cent, the price of imports of soybean, cotton, winter wheat and corn will drop by five to 10 per cent, and as a result, the cultivated farmland area will shrink,” the study stated.

Appeal

BEIJING: China appealed to Washington on Wednesday to avoid ‘politicising’ tr-ade disputes as US lawmakers consider possible sanctions over Beijing’s bulging trade surplus and cu-rrency policies. “Poli-ticising trade issues would hurt bilateral trade development,” commerce ministry spokesman said. He said problems should be resolved through dialogue. American lawmakers are working on legislation to impose possible pen-alties on China. China’s trade surplus wi-th US last year grew to $232.5 billion. — AP

Growth forecast up

BEIJING: The World Bank raised its forecast for China’s economic growth this year to 10.4 per cent on Wednesday and urged Beijing to reduce its reliance on exports by boosting domestic consumption. In a quarterly forecast, the bank raised its outlook for China’s 2007 growth from its previous estimate of 9.6 per cent. China’s economic gr-owth is still driven by external trade and investment, despite go-vernment efforts to get consumers to sp-end more. “Policy would best focus on financial sector and rebalancing the economy,” it said. — AP