China rejected claims it has manipulated yuan exchange rate policies to tilt trade flows against the United States, saying on Thursday that proposed legislation before the U.S. Congress could stoke protectionism.

Chinese Foreign Ministry spokesman Ma Zhaoxu made the statement in response to Congressional moves to curb China's exports unless Beijing realigns its exchange rate to make those exports more costly, which would help narrow the two countries' trade gap.

The legislation would require the government to impose anti-dumping and countervailing duties on imports from a country whose currency has been misaligned for a long time.

The Chinese Foreign Ministry has no direct say in trade and currency policy, and usually confines itself to general statements. Spokesman Ma stayed to that course.

The Chinese government has never engaged in so-called manipulation of currency exchange rates to obtain international trade benefits, Ma told a regular news conference.

Making groundless accusations over exchange rates will only encourage U.S. trade protectionism, and this would be of no help in really resolving the problems.

The bill appears to have slim chance of becoming law anytime soon.

Sen. Debbie Stabenow, one of the legislators who introduced the bill on Wednesday, said it was uncertain when or how the legislation would advance since she had no commitments from Senate leaders to move it forward.

U.S. lawmakers have complained that China has manipulated its currency, but President Barack Obama's Treasury Department declined to formally label China as a currency manipulator.

Previous efforts to pass similar legislation have failed.

The U.S. trade deficit with China widened to a record $266.3 billion in 2008. But the gap has narrowed slightly in the first three months of 2009, as weaker demand amid a recession has cut China's exports to the United States by nearly 11 percent.

U.S. Treasury Secretary Timothy Geithner will visit Beijing early next month for two days of meetings with top Chinese officials.

(Reporting by Chris Buckley; Editing by Ken Wills)

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