China not manipulating currency but lacks transparency, says US
WASHINGTON: Washington again declined to call China a currency manipulator but said the yuan’s fall and Beijing’s exchange practices were of “particular concern.”
In putting Beijing and five other US trading partners on notice, the US Treasury once more refrained from escalating a fight over China’s currency as US President Donald Trump had once pledged to do on the campaign trail.
“Of particular concern are China’s lack of currency transparency and the recent weakness in its currency,” US Treasury Secretary Steven Mnuchin said in releasing a twice-yearly report to Congress on how countries manage exchange rates and trade.
“These pose major challenges to achieving fairer and more balanced trade and we will continue to monitor and review China’s currency practices, including through ongoing discussions with the People’s Bank of China.”
In Wednesday’s report, the Treasury also said Germany, India, Japan, South Korea and Switzerland remained on a “monitoring list” of countries whose currency practices required “close attention.”
Washington has long argued Beijing keeps its currency artificially low to make its exports more competitive.
In recent years, however, the yuan or renminbi (RMB) has strengthened and economists now say it is more in line with China’s economic fundamentals.
Still, as US interest rates have risen, the US dollar has strengthened further, which makes American exports more expensive. The dollar this year is up 6.6 per cent against the RMB, which began to weaken substantially in June.
“Recent movements in China’s currency have not been in a direction that will help reduce China’s large trade surplus,” the report released on Wednesday said.