China’s commerce ministry says that country hasn’t manipulated the value of its currency to promote exports,refuting US claims.
“China will keep its currency stable and will not depreciate the currency to support exports,” said a ministry spokesman who couldn’t be identified under ministry rules.
The official statement today followed comments released on Jan. 22 by Timothy Geithner ‘s nominee for secretary of the treasury, that Presdient Barack Obama believes China is “manipulating its currency.”
Clashes over the yuan’s value threaten to stoke tension between two of the world’s biggest economies and undermine cooperation to counter the global recession.
(ARTICLE CONTINUES BELOW)
China limited appreciation of the yuan against the dollar in July 2008 after the currency rose 21 percent against the dollar following the end of a fixed exchange rate three years earlier.
- A d v e r t i s e m e n t
“China has never tried to gain advantage in international trade by manipulating its currency,” the commerce ministry official said. “This kind of wrong accusation against China on exchange rate issues will intensify protectionism within the US, and it will not help resolve the problem.”
People’s Bank of China Vice Governor Su Ning echoed the commerce ministry comments in an article published by the official Xinhua News Agency today that called Geithner’s allegations “untrue and misleading.” An official in the central bank’s press office declined to comment further.
Geithner’s remarks on manipulation were a shift from the policy pursued by the Bush administration, which stopped short of using the term in criticizing China’s exchange-rate management.
Geithner’s comments also stoked concern that demand from China, the largest foreign investor in US government debt, may wane. China held about USD 682b of US treasury bonds as of November, and overtook Japan as the biggest overseas owner of the debt last year.