NANJING, China - Chinese Premier Wen Jiabao said Monday the stability of the Chinese yuan was "critical" to his nation's economy after meeting with top European Union leaders.

Wen said "to maintain the stability of the renminbi (yuan) exchange rate is critical to China's economic stability."

His comments came after top European economic and finance officials on Sunday urged a "gradual and orderly" appreciation of the yuan.

"We discussed the exchange rate policy, the de facto peg of the yuan," Jean-Claude Trichet told reporters at a briefing after Sunday talks between EU officials and Wen in the eastern city of Nanjing.

He said officials encouraged Beijing to take "a more flexible policy," adding "it seems it would be appropriate."

The yuan's exchange rate is one of the thorniest trade issues between China and the European Union.

When Chinese officials talk about keeping the yuan's value "stable", they are typically referring to maintaining its current value.

The Chinese currency has been effectively pegged to the US dollar since the summer of 2008, and Europe fears the euro's resultant rise against the yuan.