China said that the U.S. risks triggering a "trade war" with legislation being considered by the Senate to punish the Asian nation for a currency that lawmakers say is undervalued.

The People's Bank of China said it "regrets" a Senate vote yesterday to consider the bill and the Foreign Ministry said the measure would violate World Trade Organization rules, in statements on their websites today.

Any slide into protectionism and trade battles risks escalating drags on a global economic recovery already weighed down by the collapsed U.S. housing market and Europe's sovereign-debt crisis. Global stocks have started October by extending a third-quarter slump that was the biggest since the aftermath of the 2008 collapse of Lehman Brothers Holdings Inc.

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