Trump contradicts US Treasury Dept. on Chinese currency
US President Donald Trump's Monday tweet accusing China of "playing the currency devaluation game" contradicts with the recent conclusion of the US Treasury Department.
"Russia and China are playing the Currency Devaluation game as the US keeps raising interest rates. Not acceptable," Trump tweeted on Monday, which is in odds with the latest report with the US Treasury Department, and inaccurately describes the economic situation.
Just last Friday, the Treasury Department said that no major trading partner, including China, manipulated their currencies.
"No trading partner was found to have met the legislative standards for currency manipulation during the current reporting period," the Department said in its Semi-Annual Report to Congress on International Economic and Exchange Rate Policies.
According to the report, "the Monitoring List comprises China, Japan, (South) Korea, Germany, Switzerland, and India."
"China is the most successful example of external rebalancing in the post-crisis period among the major surplus economies," said the report.
China's current account surplus was only 1.4 percent of GDP in the second half of 2017, sharply down from the the peak of over 10 percent of GDP in 2007.
The appreciation of the Chinese currency, yuan, in 2017, helped reduce China's trade surplus with the United States, according to the report.
In addition, the Treasury Department said it places "significant importance" on China adhering to its G20 commitments to refraining from engaging in competitive devaluation and not to target China's exchange rate for competitive purposes.
As China pushed forward market-oriented reforms on its foreign exchange rate mechanism, the Chinese currency, Renminbi, has been broadly in line with fundamentals in recent years, many economists and institutions pointed out.