CHINA yesterday told the rest of the world not to meddle with the way it manages the yuan, setting the stage for a clash with its biggest trading partners at next week's G20 summit.

United States President Barack Obama released a letter to his Group of 20 colleagues that zeroed in on prickly policy differences over China's currency stance and debt-wary Europe's rush to rein in bulging budget deficits.

World leaders gathering in Toronto next week are struggling to maintain the crisis-forged unity that has been credited with preventing another Great Depression. Now that the global economy is on the mend, divisions are beginning to show.

Cui Tiankai, a vice foreign minister who is China's official in charge of preparing for the G20 summit, said the yuan was "China's currency, so I don't think it is an issue that should be discussed internationally."

China has kept the yuan at around 6.83 per US dollar for almost two years amid the global financial crisis.

Obama, under pressure from some lawmakers who accuse his administration of soft-pedaling on China, said free-floating currencies were "essential" to global economic activity, a thinly veiled reference to the yuan.

His administration has stopped short of accusing China of manipulating its currency to give it a trade advantage, something that some members of Congress have urged.

US Treasury Department delayed its regular currency report to Congress, which was due in April, angering some lawmakers who think the administration is dragging its feet.

Obama also directed stern words at Europe. In the letter to G20 colleagues dated Wednesday, he pointed out the highest priority at next week's meeting must be to safeguard the recovery and not succumb too quickly to demands to reduce government debt.