China defends currency amid global imbalance
China has denied that its currency, the yuan – which is virtually pegged to the US dollar – is responsible for global trade imbalances, despite trading partners protesting that it artificially helps China’s exports by keeping prices low.
“The yuan’s exchange rate is not the main reason triggering China’s trade surplus, America’s trade deficit, or global economic imbalances,” said spokesperson for China’s commerce ministry, Yao Jian.
He argued that a stable yuan was necessary for the survival of Chinese companies, hence “a stable exchange rate for the yuan will remain a prime target of China’s current economic policies”.
He further stated that keeping the currency at its current value would help stabilise global financial markets, so simply allowing the yuan to appreciate was “seeking the wrong prescription” to trade imbalance.
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