China has gone to great lengths to support its currency and would not devalue the yuan to spur exports or combat trade frictions, People’s Bank of China (PBOC) Governor Yi Gang (易綱) said yesterday.
Speaking on the sidelines of China’s annual parliamentary sessions, Yi said that Washington and Beijing had discussed exchange rates during the latest 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,” Yi said. “We have committed not to do this.”
The US Department of the Treasury has declined many times to label China a currency manipulator in its twice-yearly report on international exchange rates, he said.
Beijing and Washington have been locked in a bruising trade war since last year, imposing tit-for-tat tariffs on more than US$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 earlier last week told reporters that the two sides would reach a consensus on the exchange rate and it would not be a sticking point in the way of a larger trade agreement.
In the past three to four years, the exchange rate had been under market pressure to depreciate, Yi said, adding that China had used US$1 trillion of its 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, Chinese Vice Minister of Commerce Wang Shouwen (王受文) said on Saturday, after revealing that top negotiators had tried to hammer out a deal over a lunch of burgers and eggplant chicken in one of the latest rounds of talks.
Trump on Friday said that he remains optimistic, but would not sign a pact unless it is a “very good deal.”
A top economic advisor said that Trump could walk away from a bad deal.
US Ambassador to China Terry Branstad on Friday said that the two countries were not yet ready to bring together the two leaders for a summit at the end of March to sign a deal.
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