Chinese Central Bank Official Says Nation Has No Interest In A “Currency War”
According to Morning Consult (subscription required), a top official from China’s central bank last week tried to “push back” against worries that the country will allow its currency to depreciate “to the point that it creates a ‘currency war’ with other major economies.”
In an interview with Caixin, People’s Bank of China Governor Zhou Xiaochuan said China’s strong exports were the result of a stronger U.S. dollar and “not a result of any intervention from policymakers in Beijing.” Zhou also noted that while, “Some people are concerned that China will allow [its currency] to depreciate in a bid to boost exports and GDP growth, which might intensify the so-called ‘currency war’ … If one has a closer look at China’s current account balance, he will find that in 2015 goods trade surplus was close to USD 600 billion, and net exports’ contribution to GDP was fairly high; therefore, there is not a motivation for depreciation to boost net exports.”
Morning Consult noted the U.S. Treasury Department has not yet been willing to say publicly that China manipulates its currency. In it latest report on global exchange rate policies, the department said it is “carefully monitoring” China’s efforts to let the market determine the value of its currency.
A full transcript of Zhou’s interview is available here.
Meanwhile, according a report released last week by the Manufacturers Alliance for Productivity and Innovation (MAPI), the overall U.S. manufacturing trade deficit increased 16 percent ($89 billion) in 2015. Sixty percent of that deficit was the result of the trade imbalance with China. According to MAPI, the 16 percent increase in the trade deficit resulted in 600,000 fewer manufacturing jobs.