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Wen, who is due to meet U.S. President Barack Obama in New York on Thursday during the U.N. General Assembly, said in a speech to U.S. business officials the yuan exchange rate had no relation to U.S. trade deficits and should not be politicized.

He added that a 20 percent appreciation of the yuan, also called the renminbi, as demanded by U.S. lawmakers would cause many bankruptcies in the Chinese export sector, where firms operate on thin margins.

"The conditions for a major appreciation of the renminbi do not exist," Wen said, adding the appreciation of China's currency demanded by U.S. lawmakers would not bring jobs back to the United States because U.S. firms no longer make such labor-intensive products.

A House of Representatives committee scheduled a vote for Friday on a China currency bill, and a Democratic aide said the full House was expected to vote on the measure next week.

Critics inside and outside Congress say China deliberately undervalues its currency by as much as 25 percent to 40 percent to give Chinese companies an unfair trade advantage, hurting U.S. exports and job prospects.

Obama said on Monday that China had not done enough to raise the value of the yuan, keeping up Washington's tough rhetoric on Chinese policy as U.S. lawmakers planned legislation to punish Beijing.

"It is time for Congress to pass legislation that will give the administration leverage in its bilateral and multilateral negotiations with the Chinese government," House Speaker Nancy Pelosi said in a statement.

"If China allowed its currency to respond to market forces, it could create a million U.S. manufacturing jobs and cut our trade deficit with China by $100 billion a year, with no cost to the U.S. Treasury."

In his speech in New York, Wen said, "I fully believe that all the disputes and friction in China-U.S. trade at the moment can be resolved."

He added that China wanted a "strong and stable U.S., just as the U.S. needs a strong, stable China."

"The main reason for the U.S. trade deficit with China is not the renminbi exchange rate, but the structure of trade and investment between the two countries," he said.

ISSUE GAINING MOMENTUM

U.S. lawmakers have pressed this issue for years with little success, but it appears to be gaining momentum -- and bipartisan support -- six weeks before congressional elections in which the high unemployment rate is the top issue.

The bill being considered was co-sponsored by a Democrat and Republican, and several Republican lawmakers strongly criticized China's currency policy at congressional hearings on the matter last week.