Val­u­a­tion of China’s yuan de­cided by the mar­ket say an­a­lysts

Global Times - Weekend - - NATION - By Huang Ge

The value of China’s yuan is de­cided by the mar­ket and will not pur­pose­fully be de­val­ued to fight a trade war with the US, an­a­lysts said on Fri­day.

The US Trea­sury De­part­ment’s staff has ad­vised Sec­re­tary Steven Mnuchin that China is not ma­nip­u­lat­ing its cur­rency as the Trump ad­min­is­tra­tion pre­pares to re­lease a re­port on for­eign cur­ren­cies, the Bloomberg re­ported on Fri­day, cit­ing sources.

US Pres­i­dent Don­ald Trump has pub­licly and pri­vately pres­sured Mnuchin to de­clare China a cur­rency ma­nip­u­la­tor, but Trea­sury staff has not found grounds to do so, the re­port noted.

The val­u­a­tion of China’s yuan is con­sis­tent with the trend of other for­eign cur­ren­cies and is com­pletely de­cided by the mar­ket, said Zhang Chao, a re­searcher with Taihe In­sti­tute, a Bei­jing-based think­tank.

Zhang told the Global Times that the Trump ad­min­is­tra­tion has twisted facts to blame the mar­ket-driven de­cline in the value of the yuan for the ris­ing US trade deficit be­fore the midterm elec­tions in Novem­ber.

“Although Trump has re­peat­edly ex­erted pres­sure, the US Trea­sury will not be rash and list China as a cur­rency ma­nip­u­la­tor,” Zhang noted.

The Peo­ple’s Bank of China, the coun­try’s cen­tral bank, set the yuan mid-point at 6.9120 on Fri­day, the weak­est fix­ing since March 10, 2017.

The sig­nif­i­cant US trade deficit is caused by eco­nomic struc­ture of the US rather than ex­change rate is­sues, noted Zhang.

In the first three quar­ters, China’s trade vol­ume with the US rose 6.5 per­cent year-on-year to 3.06 tril­lion yuan ($443.3 bil­lion), ac­cord­ing to data re­leased by the Gen­eral Ad­min­is­tra­tion of Cus­toms (GAC) on Fri­day.

China-US trade ten­sions have caused some im­pact on China’s for­eign trade growth, but the im­pact is con­trol­lable, and the coun­try’s for­eign trade has ad­vanced steadily since the start of this year, said Li Kui­wen, a GAC of­fi­cial.

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