China will not devalue renminbi to spur exports: central bank chief

US President Donald Trump has long accused Beijing of manipulating the renminbi to gain a trade advantage. (AFP)
Updated 10 March 2019

China will not devalue renminbi to spur exports: central bank chief

  • US President Donald Trump has long accused Beijing of manipulating its currency to gain a trade advantage
  • Washington has been seeking assurances on the exchange rate in the ongoing trade talks between the two nations

BEIJING: China has gone to great lengths to support its currency and would not devalue the renminbi to spur exports or combat trade frictions, the governor of the central bank said Sunday.
Speaking on the sidelines of China’s annual parliamentary session, Yi Gang said Washington and Beijing had discussed exchange rates in recent trade talks and reached a consensus on many “crucial” issues.
US President Donald Trump has long accused Beijing of manipulating its currency to gain a trade advantage and Washington has been seeking assurances on the exchange rate in the ongoing trade talks between the two nations.
“Let me stress here that we will never use the exchange rate for the purpose of competition, nor will we use the exchange rate to increase China’s exports or as a tool in handling trade frictions,” said Yi.
“We have committed not to do this,” Yi told reporters.
He noted the US Treasury Department had declined many times to label China a currency manipulator in its semi-annual report on international exchange rates.
Beijing and Washington have been locked in a bruising trade war since last year, imposing tit-for-tat tariffs on more than $360 billion in two-way trade, which has left global markets reeling.
“The two sides reached consensus on many crucial and important issues,” Yi said, without specifying which issues.
China’s banking regulator told reporters earlier this week that the two sides would reach a consensus on the exchange rate and indicated it would not be a sticking point in the way of a larger trade agreement.
“China’s efforts and achievements in maintaining the basic stability of the renminbi exchange rate at a reasonable and balanced level are recognized by the whole world,” Yi said.
In the past three or four years the exchange rate had been under market pressure to depreciate, Yi said, adding that Beijing had used up $1 trillion of China’s foreign currency reserves to stabilize the currency.
There have been conflicting comments from Washington and Beijing on the progress of negotiations.
Beijing is hopeful about its next round of trade talks with the US, China’s vice minister for commerce Wang Shouwen said Saturday, after revealing that top negotiators had tried to hammer out a deal over a lunch of burgers and eggplant chicken in a recent round of talks.
Donald Trump on Friday said he remains optimistic but will not sign a pact unless it is a “very good deal,” and a top economic adviser said the US president could walk away from a bad deal.
The two sides were thought to be readying for a Trump-Xi meeting at the end of March, but the US ambassador to China said Friday that the two countries were not yet ready to bring together the two leaders for a summit and deal signing.


IMF warns of Asia’s darkening growth outlook as trade war bites

Updated 18 October 2019

IMF warns of Asia’s darkening growth outlook as trade war bites

  • The IMF cut its economic growth forecast for the Asia-Pacific region to 5.0 percent for this year and 5.1 percent for 2020
  • It also slashed China’s growth forecast to 6.1 percent for this year and 5.8 percent for 2020
WASHINGTON: Asian nations face heightening risks to their economic outlooks as the US-China trade war and slumping Chinese demand hurt the world’s fastest-growing region, the International Monetary Fund said on Friday.
In its World Economic Outlook report on Tuesday, the IMF cut its economic growth forecast for the Asia-Pacific region to 5.0 percent for this year and 5.1 percent for 2020 — the slowest pace of expansion since the global financial crisis more than a decade ago.
“Headwinds from global policy uncertainty and growth deceleration in major trading partners are taking a toll on manufacturing, investment, trade, and growth,” Changyong Rhee, director of the IMF’s Asia and Pacific department, said during a news conference at the IMF and World Bank fall meetings.
“Risks are skewed to the downside,” he said, calling on policymakers in the region to focus on near-term fiscal and monetary policy steps to spur growth.
“The intensification in trade tensions between the US and China could further weigh on confidence and financial markets, thereby weakening trade, investment and growth,” he said.
A faster-than-expected slowdown in China’s economic growth could also generate negative spillovers in the region, as many Asian countries have supply chains closely tied to China, he added.
The IMF slashed China’s growth forecast to 6.1 percent for this year and 5.8 percent for 2020, pointing to the impact from the trade conflict and tighter regulation to address excess debt.