China has hit back at the United States after President Barack Obama promised to take a tougher line with Beijing over currency and trade. Meawhile, the United States is downplaying reports of rising tensions with China, saying the two countries will work together on issues of mutual concern but that they sometimes disagree.
In the latest disagreement between Washington and Beijing, Chinese Foreign Ministry spokesman Ma Zhaoxu on Thursday said the country's currency was set at a "reasonable level."
And he warned "accusations and pressure" would not help solve the problem.
Ma says the exchange rate is not the cause of the trade deficit between the two countries. He says China hopes the United States will regard trade and currency issues "in a balanced and fair light."
The terse response comes a day after President Obama promised to adopt a tougher stance toward Beijing, and push for a further opening up of Chinese markets.
U.S. companies, along with many in Europe, have longed complained that Beijing's currency policies give Chinese firms an unfair advantage.
Many trade analysts and economists say the yuan is set at an artificially low level, making Chinese goods cheap overseas.
But Beijing rejects calls for it to revalue its currency.
The issue is the latest in a growing list of grievances between the two economic powers.
Ties have been strained in recent weeks, starting with claims of Chinese cyber-attacks on U.S. Web sites, including Google.
President Obama's plans to meet the Dalai Lama, and Washington's deal to sell arms to Taiwan have strained relations further.
Ma repeated threats of sanctions against U.S. companies involved in the Taiwan arms deal.
Ma says China "will surely" impose sanctions against these companies due to what he calls Washington's "blatant disregard of our opposition and representations."
Wednesday, President Obama said he would not take a protectionist stance toward China, which is expected to become the world's second largest economy this year.
He said to shut the U.S. off from the Chinese market "would be a mistake."