IMF shows U.S. charge of currency manipulation ill founded

China Plus Published: 2019-08-10 23:13:41
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Note: The following article is taken from the Chinese-language "Commentaries on International Affairs".

The International Monetary Fund (IMF) on Friday issued a report reaffirming its stance that the value of the Chinese currency, the renminbi (RMB), was "broadly in line with the level consistent with medium-term fundamentals and desirable policies" in 2018.

[Photo: IC]

[Photo: IC]

According to the report, China's current account surplus, a major measure of a country's foreign trade, fell by around 1 percentage point to 0.4 percent of its GDP last year. It is projected to remain within half a percent of GDP this year. This provides further evidence that Washington’s accusation that China is a currency manipulator is ill founded.

During a teleconference with the media, the IMF's mission chief for China, James Daniel, said China has been making progress in moving toward a more flexible exchange rate and that the IMF is encouraging Beijing to go further along this road. This is consistent with China’s overarching policy, and shows that the IMF recognizes China’s efforts over the years to promote exchange rate marketization.

Since 2005, China has implemented a managed float system based on market supply and demand, with reference to a basket of currencies. The country has been continuously deepening the reform of its exchange rate mechanism, consistently enhancing its flexibility. China has been abstaining from competitive currency depreciation, in accordance with its commitments made at past G20 summits. It has not used and will never use exchange rates as a tool to tackle trade disputes.

Changing market demand caused the latest depreciation of the RMB. The trade tensions ignited by the United States around the globe have made markets more risk averse. As an article published by The Economist points out, the depreciation of the RMB against the U.S. dollar is a natural response to Washington’s threat to impose new tariffs on imports from China.

After the IMF released its report on Friday, several experts in the United States said it provides evidence that China did not manipulate its exchange rate last week, and that it is irresponsible for Washington to abuse its strong position in the international financial system to attack China. The voices in Washington baselessly calling China a currency manipulator should study the IMF report carefully so they can take an objective and rational stance on the issue.

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LU Xiankun Professor LU Xiankun is Managing Director of LEDECO Geneva and Associate Partner of IDEAS Centre Geneva. He is Emeritus Professor of China Institute for WTO Studies of the University of International Business and Economics (UIBE) and Wuhan University (WHU) of China and visiting professor or senior research fellow of some other universities and think tanks in China and Europe. He also sits in management of some international business associations and companies, including as Senior Vice President of Shenzhen UEB Technology LTD., a leading e-commerce company of China. Previously, Mr. LU was senior official of Chinese Ministry of Commerce and senior diplomat posted in Europe, including in Geneva as Counsellor and Head of Division of the Permanent Mission of China to the WTO and in Brussels as Commercial Secretary of the Permanent Mission of China to the EU. Benjamin Cavender Benjamin Cavender is a Shanghai based consultant with more than 11 years of experience helping companies understand consumer behavior and develop go to market strategies for China. He is a frequent speaker on economic and consumer trends in China and is often featured on CNBC, Bloomberg, and Channel News Asia. Sara Hsu Sara Hsu is an associate professor from the State University of New York at New Paltz. She is a regular commentator on Chinese economy. Xu Qinduo Xu Qinduo is CRI's former chief correspondent to Washington DC, the United States. He works as the producer, host and commentator for TODAY, a flagship talk show on current affairs. Mr. Xu contributes regularly to English-language newspapers including Shenzhen Daily and Global Times as well as Chinese-language radio and TV services. Lin Shaowen A radio person, Mr. Lin Shaowen is strongly interested in international relations and Chinese politics. As China is quite often misunderstood in the rest of the world, he feels the need to better present the true picture of the country, the policies and meanings. So he talks a lot and is often seen debating. Then friends find a critical Lin Shaowen criticizing and criticized. George N. Tzogopoulos Dr George N. Tzogopoulos is an expert in media and politics/international relations as well as Chinese affairs. He is Senior Research Fellow at the Centre International de Européenne (CIFE) and Visiting Lecturer at the European Institute affiliated with it and is teaching international relations at the Department of Law of the Democritus University of Thrace. George is the author of two books: US Foreign Policy in the European Media: Framing the Rise and Fall of Neoconservatism (IB TAURIS) and The Greek Crisis in the Media: Stereotyping in the International Press (Ashgate) as well as the founder of, an institutional partner of CRI Greek. David Morris David Morris is the Pacific Islands Trade and Investment Commissioner in China, a former Australian diplomat and senior political adviser. Harvey Dzodin After a distinguished career in the US government and American media Dr. Harvey Dzodin is now a Beijing-based freelance columnist for several media outlets. While living in Beijing, he has published over 200 columns with an emphasis on arts, culture and the Belt & Road initiative. He is also a sought-after speaker and advisor in China and abroad. He currently serves as Nonresident Research Fellow of the think tank Center for China and Globalization and Senior Advisor of Tsinghua University National Image Research Center specializing in city branding. Dr. Dzodin was a political appointee of President Jimmy Carter and served as lawyer to a presidential commission. Upon the nomination of the White House and the US State Department he served at the United Nations Office in Vienna, Austria. He was Director and Vice President of the ABC Television in New York for more than two decades.