HONG KONG: China has accused the US of risking a ''trade war'' as legislation the Senate is studying would punish what senators claim is China's undervalued currency.

The People's Bank of China said it ''regrets'' a Senate vote on Monday to consider the bill. In website statements yesterday it said the measure would violate World Trade Organisation rules.

"The only time China moves is when they feel someone might do something to force their hand" ... Democrats Senator, Charles Schumer. Credit:AP

''The timing of such an incident is unfortunate with the current global environment,'' said Lu Ting, a Hong Kong-based economist at Bank of America-Merrill Lynch. ''If there is trade war, it's no good for anybody.''

Passage of the legislation ''may lead to a trade war that we don't want to see'', the Chinese central bank said, adding that the measure wouldn't solve US ''problems'' of insufficient savings, a trade deficit and an elevated jobless rate.