BEIJING - With its external surplus melting like a snowman in the sun, China is likely to give short shrift to any attempts to blame it for the woes of the world economy when finance ministers meet in Scotland at the end of the week.
Beijing feels aggrieved that critics are dwelling on its rigid exchange rate, saying it steals jobs from others, and are not giving enough credit for its aggressive monetary and fiscal stimulus, which is sucking in imports from around the globe.
"I think China has done a lot of work and made a great contribution to helping the world economy weather the financial crisis. Keeping the yuan stable is part of that," said Zhang Xiaoji, a researcher with the Development Research Centre (DRC), a think-tank under the State Council, China's cabinet.
China let the yuan rise 21 percent against the dollar between July 2005 and July 2008 before effectively repegging the currency to help its exporters cope with a slump in global demand.
Because of the dollar's fall, the yuan's nominal effective exchange rate has depreciated 7.6 percent since its peak early this year, the World Bank said in a report issued on Wednesday.
Yet the bank forecast that China's current account surplus would fall to 5.8 percent of GDP this year, and then to 4.1 percent in 2010, from 9.8 percent last year and a peak of 11.0 percent in 2007.
Drooping demand in rich countries is, of course, part of the explanation. But China's reflation package has succeeded in generating domestic demand that has boosted imports from a wide range of trading partners, not just commodity exporters such as Australia. China's imports from Germany, for instance, are back to pre-crisis levels, according to Goldman Sachs.
As a result, net exports reduced Chinese GDP growth of 7.7 percent in the first three quarters of the year by a whopping 3.6 percentage points, according to government figures.
China, now the world's largest auto market, was contributing more to global demand than either the United States, the euro zone or Japan, said Vikram Nehru, the World Bank's regional chief economist.
"China's rapid growth is not only pulling the region along; it is also having an impact on the global economy," Nehru told reporters.
As such, China will feel it can marshall strong arguments at the Group of 20 meeting in St. Andrews that it is already pulling its weight and that currency adjustments are not the be all and end all.
Rather, they are just one component of a broad set of policies needed to put the global economy back on an even keel.
And even though China recognises the need eventually to restore flexibility to the exchange rate, why, officials ask, take unnecessary risks now with the global economy still wobbly?
"The time is not ripe for China to resume yuan appreciation because the prospects for the world economy ares still not very clear," Zhang, the State Council researcher, said.
"The G20 should work out a global economic rebalancing plan that benefits all countries, not just a few," he added.
Above all, many Chinese economists see the country's still big trade surplus as the consequence of deep-seated reasons that have little to do with the exchange rate, such as a structural excess of savings. Here, there is a parallel with Germany.
"China's exports accounted for 8 percent of the global total in 2008, and Germany for 9 percent. Why didn't we blame Germany for the imbalance in the world economy?" DRC vice-head Lu Zhongyuan was quoted as saying in Wednesday's overseas edition of the People's Daily, the ruling Communist Party's mouthpiece.
China, moreover, is merely the final link in the intricate global supply chains of multinational companies, for which the yuan's exchange rate, though important, is just one factor.
"How can we change the international labour division simply by letting the yuan appreciate?" asked Lu.
Wu Zhifeng, a senior economist with China Development Bank in Beijing, agreed: "I don't think rebalancing can be achieved in three to five years, and I don"t think a hasty move would help."
The purpose of the St. Andrews meeting is to flesh out a commitment to subject national policies to international scrutiny and peer pressure in the years ahead to make sure they are helping to iron out global imbalances.
To that end, China's priorities include stemming the tide of protectionist measures aimed at its exporters and underlining the need for deficit countries to live within their means.
China particularly has in mind the United States, fearing that prolonged U.S. fiscal and monetary laxity will debase the dollar and rekindle inflation, destroying the value of Beijing's horde of U.S. Treasury securities.
But while the International Monetary Fund could play a limited role of policy coordinator among G20 members, it would be extremely hard to come up with a workable plan, Wu said.
If China resents being made the scapegoat for global economic imbalances, it feels just as strongly that its willingness to tackle global warming - another G20 priority - is not properly appreciated.
Climate change has risen rapidly up the agenda of China's leaders, even as they struggle with the financial crisis, because they are worried about the impact of global warming on the country and heavy international pressure to act.
President Hu Jintao made a landmark pledge at the United Nations in September to put a "notable" brake on carbon dioxide emissions by 2020, reflecting the changing political priorities.
But China has repeatedly rejected calls that it commit itself to a peak year or level of emissions, saying it must put economic development first since millions still live in deep poverty.
Beijing wants a greater commitment from developed countries to cut their own emissions and pay for cleaner growth in poor nations. In doing so they would discharge their global obligation for having enjoyed decades of emissions-intensive industrialisation, Beijing argues.