MANILA -- China's Finance Minister Jin Renqing cautioned Thursday that any tampering with his country's currency peg to a declining U.S. dollar could cause havoc to a world economy already facing uncertainty.

He was defending Beijing's refusal to revalue the yuan despite growing international pressure to change the unit's peg to the falling greenback.

The yuan has been effectively linked to the U.S. dollar at a closely managed rate of about 8.28 since 1994, allowing Chinese exporters to gain competitiveness because of the recent decline of the US currency.

Since the exchange rate mechanism was established nine years ago, China's economy had been stable with economic development progressing well, Jin said at a news conference in Manila after attending an annual meeting with finance ministers from the Association of Southeast Asian Nations (ASEAN) as well as those from Japan and South Korea.

He noted that the stable development of the Chinese economy had also given a stabilizing effect on Asia and the rest of the world.

"Now that there is uncertainty of the world economy and some of the major economies are experiencing stagnation of their economic development, it is of utmost importance for China to maintain stable growth.

"Especially because a stable Chinese economy is helpful to Asia and the world as a whole," Jin said.

But the minister did not rule out a review of China exchange rate mechanism in the future but on its own terms. "We will try to establish an exchange rate mechanism which is country specific for China and which will help develop (further) the Chinese economy and the world as a whole," he said. Analysts estimate the yuan is undervalued by at least 15 percent or even more.

The United States, Europe, Japan and South Korea are among those who have expressed concern over the current yuan value.

Japanese Finance Minister Finance Minister Masajuro Shiokawa indicated at the same news conference Thursday that the time might be ripe for China now to review its peg, considering its extensive foreign reserves and rapid economic growth.

But he said China, like any other country, had the right to choose its own exchange rate policy.

"Presently, China is enjoying fast economic growth, favorable trade balance and good exports. China has also accumulated much foreign reserves.

"So perhaps, how the exchange rate should be decided also needs to take into consideration its relationship with a very high level of foreign reserves," Shiokawa said. But he hastened to add that "everything needs to be decided by China, by herself."

Earlier, the ASEAN finance ministers at their meeting defended China's refusal to review its exchange rate mechanism.

"Our position is we respect China's position and we encourage what it is already doing because China is evolving also," Philippine Finance Secretary Jose Isidro Camacho, the meeting's chairman, told AFP reporters.

Jin recollected at the press conference that China also did not review its peg to the dollar during the 1997-1998 financial crisis in Southeast Asia when the region's currencies tumbled and affected Chinese export competitiveness.

Some Southeast Asian countries today compete head on with Chinese exports although China in recent years have been gradually importing more goods from this region.

ASEAN comprises Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

Like the yuan, the Malaysian ringgit is also pegged to the US dollar. Most of the other Southeast Asian currencies, including the Singapore dollar, have been allowed to weaken against the dollar in recent months so as to keep pace with the downturn in the US unit.