China won’t weaken currency to boost exports: Premier

TIANJIN: China will not stoop to competitive devaluation of its currency, Premier Li Keqiang stressed, hours after China hit back, with a softer punch than the one landed by the United States, in an escalating tariff war between the world’s largest economies.
Addressing a World Economic Forum event in the port city of Tianjin on Wednesday, Li did not directly mention the trade conflict but he said talk of Beijing deliberately weakening its currency was “groundless.”
“One-way depreciation of the yuan brings more harm than benefits for China,” he said. “China will never go down the road of relying on yuan depreciation to stimulate exports.”
China will not do that to chase “thin profits” and “a few small bucks”.
Li went on to say that the world’s multi-lateral trading system should be upheld, and that unilateral trade actions will not solve any problems.
His remarks gave a lift to the yuan, which has lost about 9 per cent of its value since mid-April amid the ongoing trade war.
On Tuesday, Beijing added $60 billion of US products to its import tariff list in retaliation for US President Donald Trump’s planned levies on $200 billion of Chinese goods.
China has yet to publicly accept an invitation extended last week by US Treasury Secretary Steven Mnuchin to hold a fresh round of talks, which China welcomed at the time.
On Wednesday, Foreign Ministry spokesman Geng Shuang said he had no information on a possible trade delegation and questioned US sincerity about wanting new talks, noting that the last round was followed immediately by the activation of new tariffs. “This has become a kind of US routine,” he said.
The United States has so far imposed tariffs on $50 billion of Chinese products to pressure China to make sweeping changes to its trade, technology transfer and high-tech industrial subsidy policies, with China responding with similar scale tariffs.
The new US tariffs will begin on September 24 at 10 per cent and will increase to 25 per cent by the end of 2018, with Bank of America Merrill Lynch forecasting a 0.5 percentage point decline in Chinese gross domestic product (GDP) growth for 2019 to 6.1 per cent. Oxford Economics said in a note that its baseline forecast for Chinese GDP in 2019 could fall well below 6 per cent, and said prospects for near-term easing in tensions were low. — Reuters