China has ‘no intent’ to seek advantages via devaluation
US to follow currency review process: Mnuchin
China said on Friday it has no intention of using currency devaluation to its advantage in trade, responding to an assertion from US President Donald Trump that China is “grand champion” of currency manipulation.
Trump said in an interview with Reuters on Thursday he had not “held back” in his assessment that China manipulates its yuan currency, just hours after his new Treasury Secretary Stephen Mnuchin pledged a more methodical approach to analyzing Beijing’s foreign exchange practices.
Geng Shuang, spokesman for the Chinese foreign ministry, told a daily briefing on Friday that he hoped the US could “fully and correctly” view the exchange rate issue.
“China has no intention of seeking foreign trade advantages via an intentional devaluation of the renminbi. There is no basis for the continued devaluation of the renminbi,” Geng said.
“If you must attach the label ‘grand champion’ to China, then I think China is a grand champion. But we are the grand champion of economic development,” Geng noted.
Trump has frequently accused China of keeping its currency artificially low against the dollar to make Chinese exports cheaper, “stealing” American manufacturing jobs, said Reuters.
But he did not act on a campaign promise to declare China a currency manipulator on his first day in office.
“Interfering in the foreign exchange market is the right of a sovereign state’s government. It is the same with the US… Manipulating exchange rates – another concept different from interference – is for malicious purposes,” He Weiwen, an executive council member of the China Society for WTO Studies, told the Global Times.
Hours before Trump’s remarks, Mnuchin said he was not ready to pass judgment on China’s currency practices.
Trump’s delay in designating China as currency manipulator after taking office late January as well as the disagreement between Trump and his Treasury secretary pointed to difference within the Trump administration remains, Li Haidong, a professor with the Institute of International Relations at China Foreign Affairs University, told the Global Times on Friday.
Asked if the US Treasury was planning to name China a currency manipulator any time soon, Mnuchin said he would follow its normal process of analyzing the currency practices of major US trading partners, Reuters reported.
The US Treasury is required to publish a report on these practices on April 15 and October 15 each year.
“We’re not making any judgments until we continue that process,” Mnuchin said in his first televised interview since formally taking over the department last week.
“Secretary Mnuchin underscored that he looked forward to fostering strong US-China engagement during his tenure,” said a readout from the US Treasury spokesperson on February 17.
“The secretary emphasized the importance of achieving a more balanced bilateral economic relationship going forward. He conveyed his commitment to working with the Chinese leadership on a comprehensive set of economic, financial, trade and investment, and illicit finance issues,” the statement said.
Mnuchin has adopted a professional approach toward China whereas Trump jumped to his conclusion by intuition, blaming China for manipulating currency simply based on the fact that China has a favorable balance of trade, a Beijingbased expert on US studies who declined to be named, told the Global Times on Friday.
US President Donald Trump on Thursday declared China the “grand champions” of currency manipulation, indicating he has not “held back” in his previous assessment. His statement, made during an interview with Reuters, came hours after his new Treasury Secretary Stephen Mnuchin pledged a more methodical approach to analyze Beijing’s foreign exchange practices.
Trump also told Reuters that China could solve the national security challenge posed by North Korea “very easily if they want to.”
The impression Trump left was that he has been talking about China based on his own imagination. He knows nothing about China’s currency policies and had no idea about the nature of Sino-North Korean relations.
What he saw was a Chinese trade surplus and that many Chinese goods are sold at cheaper prices than US products. He felt that the yuan was “kept low artificially” because 1 yuan is worth a lot less than 1 dollar. This perception is obviously fictitious. China sold a lot of its foreign currency reserves last year to maintain yuan stability. Trump’s accusation of China’s forex policy is groundless.
As for Sino-North Korean relations, many Americans, Trump included, believe Pyongyang would listen to whatever Beijing says. But the latest critique from Pyongyang’s official news agency, which lashed out at Beijing, clearly suggests otherwise.
Trump’s comments indicate that he has not discussed the currency manipulation issue with Mnuchin. China’s current currency policy, which aims at preventing yuan depreciation, is actually in line with Trump’s wish.
As US president, Trump should be more cautious when commenting on other countries. After all, the White House is not a standup comedy theater. Every word of the US president will be recorded and discussed. When the US president says whatever comes across his mind and is not held responsible for his words, people do not know how to respond to it.
Many countries have been criticized by Trump but it is still unclear what these criticisms stand for in diplomatic terms.
China is earnest about maintaining sound Sino-US relations and takes the US’ opinions seriously. However, China won’t be able to satisfy unreasonable demands and if the US insists on doing so, frictions are bound to emerge.
Trump has demonstrated extraordinary capabilities in his past successful career. However he should start a new learning process when entering an arena such as the Sino-US diplomacy. We strongly feel that his knowledge about China is ill-matched for his responsibility. Given the gravity of Sino-US ties, we hope it could be remedied as soon as possible in the US institutions.