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China says it will never use its currency as a weapon in the trade war

The trade war between China and the United States is intensifying, but Beijing has just tak...

Posted: Sep 19, 2018 12:11 PM
Updated: Sep 19, 2018 12:11 PM

The trade war between China and the United States is intensifying, but Beijing has just taken one potential weapon off the table.

Premier Li Keqiang told an audience of global executives and policymakers that China would not weaken the yuan to boost trade with the rest of the world.

"China will never go down the path of stimulating exports by devaluing its currency," Chinese Premier Li Keqiang said Wednesday.

His comments came a day after the United States and China announced that they would impose their biggest rounds of tariffs yet on each other's exports, starting next week.

That brings the value of goods hit by tariffs in the escalating conflict to more than $360 billion. President Donald Trump has threatened to hit another $267 billion of Chinese goods with tariffs.

China, which buys far less from the United States than the other way round, is starting to run low on American products to target, raising speculation about what other measures it could take to hit back.

Driving down the currency, which is also known as the renminbi, isn't one of them, according to Li.

"Persistent depreciation of the renminbi will only do more harm than good to our country," he said during a speech at a World Economic Forum event in the northern Chinese city of Tianjin.

The yuan has dropped sharply against the dollar as the trade fight has ramped up, losing about 9% of its value since April.

Accused of manipulation

The decline has drawn the attention of President Trump, who has often accused China of devaluing the yuan to boost its huge export industry. Trump claimed in July that China was "manipulating" its currency lower.

Li dismissed that idea on Wednesday.

"The recent fluctuations in the renminbi exchange rate have been seen by some as an intentional measure on the part of China," he said. "This is simply not true."

The Chinese government plays a significant role in setting the value of the yuan and how it trades. Economists generally agree Beijing kept the currency artificially low in the past, but they are skeptical that government intervention has driven it down against the dollar and other major currencies this year.

They say the escalating trade war with the United States and concerns over a slowdown in the Chinese economy have helped push the yuan lower at a time when the US Federal Reserve is steadily raising interest rates. That policy makes it more attractive for investors to hold assets in US dollars, prompting them to sell other currencies.

Sudden drops in the yuan in 2015 and early 2016 set off turmoil in global markets as money poured out of China's economy. Beijing spent hundreds of billions of dollars propping it up.

China will "work to create conditions for keeping the value of the yuan stable," Li said Wednesday.

His words weren't enough to convince everyone, though.

"Manipulation has occurred and is occurring, and I hope that action is taken," Todd Rokita, a Trump-supporting congressman from Indiana, told CNN at the Tianjin conference just minutes after Li's speech.

Indiana Coronavirus Cases

Data is updated nightly.

Cases: 752108

Reported Deaths: 13816
CountyCasesDeaths
Marion1033831790
Lake558431013
Allen41736693
St. Joseph37007565
Hamilton36617417
Elkhart29425461
Tippecanoe22938228
Vanderburgh22565400
Porter19369327
Johnson18486389
Hendricks17696317
Clark13233195
Madison13176344
Vigo12631253
LaPorte12429221
Monroe12226176
Delaware10970198
Howard10349224
Kosciusko9643121
Hancock8578147
Bartholomew8174157
Warrick7864156
Floyd7815180
Grant7248179
Wayne7164201
Boone6979103
Morgan6768141
Dubois6224118
Marshall6214116
Cass6024110
Henry5903110
Dearborn589878
Noble581688
Jackson509476
Shelby502396
Lawrence4753122
Gibson445595
Clinton443555
Harrison441775
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Steuben400859
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White332753
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Greene286885
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Scott270356
Clay267148
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Starke228159
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Sullivan214843
Owen212358
Fulton204043
Jay201032
Carroll193820
Orange188255
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Vermillion175344
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Newton114936
Brown104443
Benton102614
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Union72810
Ohio57911
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Ohio Coronavirus Cases

Data is updated nightly.

Cases: 1109697

Reported Deaths: 20213
CountyCasesDeaths
Franklin1289521469
Cuyahoga1158802216
Hamilton814201251
Montgomery525861049
Summit484551006
Lucas43384824
Butler39098606
Stark33355930
Lorain25689506
Warren24612305
Mahoning22388602
Lake21219389
Clermont20138253
Delaware18892136
Licking16671225
Fairfield16589204
Trumbull16560483
Medina15618273
Greene15292248
Clark14244306
Wood13296200
Portage13254216
Allen11919239
Richland11611211
Miami10857225
Wayne9153225
Columbiana9039230
Muskingum8909135
Pickaway8664122
Tuscarawas8654251
Marion8649139
Erie8058165
Ashtabula7171179
Hancock6999133
Ross6948163
Geauga6850151
Scioto6540106
Belmont6159174
Union585049
Lawrence5741102
Jefferson5683159
Huron5554122
Sandusky5444126
Darke5420129
Seneca5350128
Washington5321109
Athens524460
Auglaize502487
Mercer487785
Shelby477095
Knox4573112
Madison444566
Ashland435997
Putnam4336104
Defiance432399
Fulton432274
Crawford4046110
Brown402761
Logan387678
Preble3859105
Clinton379266
Ottawa373581
Highland360266
Williams348578
Champaign344959
Guernsey325254
Jackson318454
Perry297350
Morrow291940
Fayette285750
Hardin275765
Henry273867
Holmes2703101
Coshocton269360
Van Wert247264
Adams243156
Pike242835
Gallia240850
Wyandot234756
Hocking220663
Carroll197548
Paulding176642
Meigs148540
Monroe136345
Noble136239
Harrison114138
Morgan110124
Vinton85717
Unassigned03
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