VOLATILITY in China’s yuan since August is a normal market reaction to escalating trade frictions stoked by the United States and was caused, to some extent, by Washington’s decision to raise tariffs, a senior Chinese central bank official said. Zhu Jun, director-general of the People’s Bank of China’s international department, made the comments Saturday to a forum held in the northeastern Chinese province of Heilongjiang. The U.S. Treasury Department last Monday labelled China a “currency manipulator,” hours after the yuan dropped through a key support level to its lowest point in more than a decade. The moves jolted financial markets, fueling fears of a global currency war. Days earlier, U.S. President Donald Trump vowed to impose a 10 percent tariff on US$300 billion in Chinese imports from Sept. 1, ending a temporary truce and sharply escalating the trade dispute. Zhu said that the yuan’s move was a normal reaction to Trump’s tariff threat. “The labeling...violates basic, common economic sense and international consensus, and is unconvincing,” Zhu said, adding that the Chinese economy was resilient and capable of coping with various situations. The year-long trade dispute between the world’s two largest economies has already spread beyond tit-for-tat tariffs on goods to other areas such as technology. (SD-Agencies) |