China Mofcom plays down yuan impact on exports

The Commerce Ministry has traditionally opposed a stronger yuan, fearing it will hit export-oriented manufacturers working on thin margins.

But Jiang told a forum that the exchange rate was just part of the equation for manufacturers.

"Looking at the timing of China's currency reform, we can say that the overall benefits to exports are greater than the damage," he said.

The impact of the exchange rate was secondary to a host of other factors, including wages, the cost of raw materials, final demand, the level of interest rates and tax rates, Jiang said.

He cited conditions in 2005-2008, when Chinese exports continued to grow strongly despite a cumulative 21 percent rise in the yuan against the dollar.

But Jiang sidestepped the question of whether exporters could cope with a yuan rise of 3 to 5 percent within a year.

He said the pace of currency appreciation would be gradual and dismissed as groundless accusations that China manipulated the yuan to give its companies an unfair advantage in global markets.

The People's Bank of China said on Saturday that it would once again allow the yuan to move more freely after having kept the currency more or less pegged to the dollar for two years to provide stability for exporters during the global downturn.

The yuan has since risen about 0.5 percent against the dollar.

(Reporting by Langi Chiang and Alan Wheatley; Editing by Chris Lewis)