CHINA yesterday voiced strong opposition to the U.S. decision to label it “a currency manipulator,” stressing that China has never resorted to competitive devaluation and will not use the currency as a tool to deal with trade disputes.

In a response to the designation, China’s central bank refuted the unilateral move, saying the label does not meet the quantitative criteria for the so-called “currency manipulator” set by the U.S. Treasury.

“The U.S. labeling is an arbitrary unilateral and protectionist practice, which seriously undermines international rules and will significantly impact the global economy and financial markets,” the People’s Bank of China (PBOC) said in an online statement.

Ronald Wen, a Hong Kong-based senior banker, said the alleged currency manipulation is a new weapon used by the U.S. in the trade friction with China, sending a signal that the U.S.-waged trade war is being expanded to more fields, including forex and financial markets.

The U.S. Treasury designation was seen by analysts as a new excuse for more protectionist measures.

The Treasury move reeks of arbitrariness and unilateralism, and will disrupt international trade rules and order as well as dampened investors’ confidence, experts said.

“By labeling China a currency manipulator, the U.S. is in fact continuing its maximum-pressure approach in trade talks,” said Liao Qun, chief economist of the China CITIC Bank International.

China and the U.S. have been locked up in drawn-out trade disputes since last year.

China has long been committed to keeping the yuan’s exchange rate basically stable at a reasonable and balanced level, the central bank said.

The Chinese currency is the strongest among the G20 and is one of the currencies that have seen substantial appreciation.

From the beginning of 2005 to June this year, the currency’s nominal exchange rate appreciated 38 percent and real exchange rate strengthened 47 percent. Last month, the IMF concluded in its annual assessment that the renminbi exchange rate was broadly in line with fundamentals.

From the macro perspective, the yuan’s exchange rate is buoyed by the country’s sound fundamentals, strong economic resilience, stable fiscal position, controllable financial risks, balanced cross-border capital movement and sufficient foreign exchange reserves.

China has no intention to gain trade advantages by devaluing its currency, as the yuan’s depreciation cannot necessarily lift exports, said Song Xiangyan, an analyst with the PBOC.(Xinhua)