Labeling China as currency manipulator will hurt Washington in the end: experts

Chinese experts on Tuesday criticized the US’ move to label China as a currency manipulator, saying that the decision will hurt the US in the end.

“China is not a currency manipulator by any standard, and the yuan’s exchange rate is determined by market supply,” Zhang Xuechun, deputy head of the Research Institute of the People’s Bank of China (PBC), said at a forum held by staterun media outlet Guangming Daily.

On August 5, both the onshore and offshore yuan broke the psychological barrier of 7 against the US dollar, falling to new 11-year lows. The next day, the US Treasury Department issued a statement in which it said it would list China as a currency manipulator.

The PBC later said that China will not use the currency as a tool to deal with trade disputes and the US label does not meet the quantitative criteria for socalled currency manipulators set by the US Treasury.

“If the downward fluctuation of the yuan exchange rate is regarded as exchange rate manipulation, it is also manipulated by the US,” Zhang noted, adding it is the unilateralism of the US that has triggered market volatility.

“Labeling China a currency manipulator shows that the US has no other tools in the trade war,” Wei Benhua, former deputy head of China’s currency regulator, said on Tuesday.

The move is a despicable way for the US to pass on risks in the face of weak global economic growth, Xu Hongcai, a deputy director of the economic policy commission at the China Association of Policy Science in Beijing, said.

“Labeling China as a currency manipulator will definitely directly affect high asset prices in the US, which in turn will trigger a vicious circle of credit deflation and economic contraction,” Yin Jianfeng, a researcher from a think tank the Chinese Academy of Social Sciences, said.