BEIJING: China yesterday defended the valuation of its currency and pushed back against a US Treasury report expressing concerns over the yuan’s sharp slide since January.
The statement by Chinese foreign ministry spokeswoman Hua Chunying came a day after the Treasury issued its twice-yearly report, in which it declined to brand China a currency manipulator but said that the yuan, or renminbi (RMB), “remains significantly undervalued”.
“China’s position is that China will keep forward with the reform of RMB exchange rate mechanism,” Hua told reporters at a regular briefing. “This will not change. We hope the American side can make concerted efforts with China to improve trade and investment relations with China.”
Washington has repeatedly voiced concern over the valuation of the yuan, arguing that Beijing keeps its currency artificially low to boost Chinese exports. But the Treasury has shied away from calling China a “manipulator” — despite the urgings of some members of Congress — as doing so could trigger the imposition of trade sanctions and risk igniting a costly trade war.
China’s yuan currency ended at 6.2215 to $1 yesterday, weakening slightly from the close of 6.2211 on Tuesday, according to figures from the China Foreign Exchange Trade System. The yuan has lost around 2.7 percent against the dollar so far this year, nearly erasing a gain of three percent last year.
China has pledged to move gradually towards full convertibility of the yuan, with the central bank last month doubling the daily trading band for the currency. The Treasury hailed that move as “an opportunity to reduce intervention and allow the market to play a greater role in determining the exchange rate”.
But it warned that the yuan’s recent fall could “raise particularly serious concerns” if it represents a reversal in Beijing’s commitment. AFP
