China’s Commerce Minister said Beijing could adjust its currency policy if it found the yuan’s appreciation had contributed to the nation’s first quarterly trade deficit in seven years.

“If it’s (trade deficit) caused by the exchange rate, then possibly we will have to readjust our exchange rate policy,” Chen Deming told delegates at an annual international forum on the southern island of Hainan.

“If the deficit is not caused by the exchange rate of the RMB, then I don’t think we need to slow down or adjust the pace of the RMB exchange rate revaluation,” he said at the gathering in Boao, referring to the currency’s official name of renminbi.

The Boao forum brought together leaders in government, business and academia in Asia and other continents every year since 2001 to discuss pressing issues in the region and the rest of the world.

China posted its first quarterly trade deficit in seven years in the first three months of 2011 amid rising commodity prices, which analysts said suggested it was making progress in rebalancing its export-reliant economy.

Beijing is under growing pressure from its trade partners for a stronger currency, with its critics claiming a weak yuan gives Chinese firms an unfair advantage and exacerbates global trade imbalances.

China pledged in June to loosen its grip on its currency following intense international pressure. The value of the yuan has strengthened less than five percent since then – not quickly enough for some of its trade partners.

Policymakers have repeatedly vowed to make the yuan exchange rate more flexible but ruled out a rapid appreciation, arguing such a move would hurt the country’s vast manufacturing sector and trigger widespread job losses.