U.S. lawmakers risk poisoning the atmosphere with China through proposed laws aimed at the yuan currency, China's official news agency said on Sunday, calling Congress members baby kissing incompetents.

The commentary from the state-run Xinhua news agency was Beijing's latest jab at members of the U.S. Congress demanding legislation tackling what they say is China's policy of keeping its yuan currency artificially low against the dollar.

One of the most vocal backers of such action, Senator Charles Schumer, a Democrat, said this week that he and other colleagues want a vote in the next two weeks on legislation to allow the use of anti-dumping and countervailing duty laws against China or any other country deemed to have a fundamentally misaligned exchange rate.

Late last month, China and the United States avoided open contention over the yuan at high-level talks held in Beijing. The Xinhua commentary was not so polite.

When they are manipulating the yuan debate, these American politicians may make some short-term political gains, but they put the long-term Sino-U.S. bilateral relations in jeopardy, said the English-language commentary.

These congressmen claim they are the white knights defending the interests of the American people, but in fact, they are nothing more than a bunch of baby-kissing politicians trying to swing voters by manipulating the yuan debate.

The commentary repeated Beijing's stance that the United States' trade deficit with China could not be blamed on the yuan. It said the U.S. lawmakers were trying to divert public attention from much more serious domestic economic problems, which are caused in part by their incompetence.

Chinese government leaders have not used such strong words in opposing the proposed U.S. legislation. But the commentary gave some hint of the acrimony that could erupt between the world's biggest and third biggest economies if bills targeting the yuan exchange rate move closer to becoming law.

With many U.S. lawmakers facing re-election in November and unemployment hovering just below 10 percent, political pressure is building on President Barack Obama's administration to push China to break the yuan's nearly two-year-old peg to the dollar.

U.S. Treasury Secretary Timothy Geithner said on Thursday the yuan was an impediment to global rebalancing, indicating that U.S. patience with China's currency policy was wearing thin.

After partly freeing its currency to rise gradually from mid-2005 to mid-2008, China repegged the yuan to the dollar at a rate that U.S. lawmakers and some economists say is as much as 40 percent below the appropriate value.

(Reporting by Chris Buckley; Editing by Alex Richardson)

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