Daily Mirror (Sri Lanka)

China has tools to handle trade war: central bank chief

-

BEIJING (AFP) - China’s central bank chief said yesterday the country has plenty of policy tools left to handle the trade war with the United States.

There is “tremendous” room to counter the deepening trade war,

People’s Bank of China governor Yi Gang said in an interview with Bloomberg TV.

“We have plenty of room in interest rates, we have plenty of room in required reserve ratio rate, and also for the fiscal, monetary policy toolkit, I think the room for adjustment is tremendous,” Yi said on Bloomberg TV.

Ties between China and the US have deteriorat­ed sharply after trade negotiatio­ns stalled last month without a deal to lift bruising tariffs on goods worth $360 billion in two-way trade.

China said Thursday that it would soon release detailed informatio­n about a planned blacklist of “unreliable” foreign companies and individual­s, that analysts expect will target firms cutting off supplies to Chinese tech giant Huawei.

Last month the US Commerce Department placed Huawei and dozens of its affiliates on an “entity list” on grounds of national security, curbing its access to crucial Us-made components and software -- though a 90-day reprieve was later issued.

Yi has participat­ed in several rounds of the trade negotiatio­ns with Washington and is scheduled to meet with US Treasury Secretary Steven Mnuchin this weekend during the G20 gathering of financial policymake­rs in Japan.

He said the meeting with Mnuchin would be “productive talk, as always,” but trade war discussion­s would be “uncertain and difficult”, according to Bloomberg News.

China’s yuan, or renminbi, currency has also rapidly depreciate­d against the dollar as trade tensions have ramped up in recent weeks, nearing the critical seven to the dollar exchange rate.

The central bank has long prevented the yuan from falling below seven, but Yi hinted the bank may no longer defend the currency at that level.

“I don’t think along this mathematic­al scale any number is more important (than) the other number,” he said.

“The trade war would have a temporary depreciati­on pressure on renminbi, but you see, after the noise, (the) renminbi will continue to be very stable and relatively strong compared to emerging market currencies, even compared to convertibl­e currencies,” he told Bloomberg TV.

“I’m very confident (the) renminbi will continue to be stable at a more or less equilibriu­m level,” Yi said.

 ??  ?? Yi Gang
Yi Gang

Newspapers in English

Newspapers from Sri Lanka