(Yicai Global) Oct. 18 -- China is not manipulating its currency to gain an advantage in trade, the US Treasury Department said yesterday in its semi-annual report on foreign exchange policies.
This is the second time the US Treasury has made the above statement since President Donald Trump took office.
No major trading partner of the United States met the standards for currency manipulation, the report said. China, Japan, Germany, South Korea and Switzerland will remain on the Monitoring List.
“China’s recent intervention in foreign exchange markets, tightened capital controls and increased discretion over setting the daily fixing rate of the RMB have likely prevented a disorderly currency depreciation that would have had negative consequences for the United States, China and the global economy,” the latest report said.
“Through the end of September, the renminbi has strengthened 4.4 percent against the dollar,” the US Treasury Department said.
The US Treasury Department set up the Monitoring List last April, and established three criteria -- a bilateral trade surplus with the United States of at least USD20 billion, a material current account surplus that is at least 3 percent of gross domestic product (GDP) and the presence of persistent, one-sided interventions.
If an economy meets all three, the US will negotiate with the economy and may introduce retaliatory measures. If two are met, the economy will be placed on the Monitoring List for close observation. The list included Japan, Germany, South Korea and Switzerland for meeting two criteria.
Since the Trump Administration came into power, an economy accounting for a large and disproportionate share of the overall US trade deficit, such as China, will be added to the Monitoring List if it meets one criterion. China is on the list, as it meets the first.