China promises not to weaken currency, criticizes US concern
‘Yuan depreciation speculation groundless, irresponsible’
BEIJING, Oct 9, (Agencies): China’s government has promised not to weaken its currency to boost exports and rejected US concern about the sagging yuan as groundless and irresponsible.
A foreign ministry spokesman, Lu Kang, said Tuesday that Beijing has no intention of using “competitive devaluation” to make exports less expensive during a tariff fight with Washington.
A US official told reporters in Washington the Trump administration is concerned about the weakening yuan.
The tightly controlled Chinese currency fell to a 22-month low of 6.93 to the dollar on Monday before recovering slightly on Tuesday.
Lu said the US official’s comments were “groundless speculation and irresponsible.” The United States remains concerned about China’s recent currency depreciation, a senior Treasury official said on Monday, adding that it was unclear whether
Treasury Secretary Steven Mnuchin would meet with any Chinese officials at the International Monetary Fund and World Bank meetings this week.
“On Chinese currency, of course, we continue to closely monitor developments in the RMB (yuan), we remain concerned about some of the recent depreciation of the RMB,” the official told reporters on a conference call. “More broadly, we’re concerned about China’s turn away from more market-oriented policies and continued reliance on nonmarket mechanisms that impact the macroeconomic and trade environment.”
The official said these concerns would be laid out in the Treasury Department’s semi-annual currency report, which is due to be released next week. But he declined to preview any details of the report.
Mnuchin told Reuters in July that he was closely monitoring the depreciation of China’s yuan for signs of manipulation. US President Donald Trump has frequently accused China of manipulating its currency for a trade advantage.
Meetings
The Treasury official said Mnuchin currently has no meetings scheduled with Chinese officials at the IMF and World Bank meetings on the Indonesian resort island of Bali, but his schedule was still being firmed up. Mnuchin’s normal Chinese counterpart on trade-related issues, Vice Premier Liu He, will not attend the meetings, so there are unlikely to be trade discussions, the official said.
China normally sends central bank governor Yi Gang and Finance Minister Liu Kun to IMF and World Bank gatherings. It is possible Mnuchin would meet with them, but they would likely discuss topics other than trade, the official added.
The United States and China are embroiled in an escalating trade war. Washington last month slapped tariffs on $200 billion worth of Chinese goods, which prompted Beijing to retaliate with duties on $60 billion worth of US products.
The United States and China had already imposed tariffs on $50 billion worth of each other’s goods.
Chinese banks were told by the government Sunday to lend more to entrepreneurs to help shore up flagging economic growth amid an escalating trade dispute with Washington.
The central bank said it had released 750 billion yuan ($109 billion) for additional lending by reducing bank reserve requirements by 1 percent. It said the money was for small enterprises - the official term for private companies that generate China’s new jobs and wealth.
The dispute with the US is adding to downward pressure on an economy that already was forecast to cool after Beijing tightened lending controls to rein in a debt boom.