China not to devalue currency as trade war with US builds up

Yuan-Dollar. [Photo: Courtesy]

China has said that its currency will remain stable despite heightened trade war with United States. This comes amid concerns of the Yuan dropping against the dollar with about nine percent.

Premier Li Keqiang told his audience of global executives and policy makers that China is not going to devaluate its currency to boost business with the rest of the world.

The Chinese premier said, ‘’China will never go down the path of stimulating exports by devaluing its currency.’’ The US earlier on said that it would have to impose high tariffs on China exports beginning next week which saw China also reiterate by also imposing a high tariff on United States exports.

President of the United States, Donald Trump had targeted to impose $267 billion of Chinese goods with tariffs. China is said to buy less from the US than the latter does.

Li says that undervaluing the currency will not be the target of hitting back on the super power during the World Economic Forum in Tianjin, China. "Persistent depreciation of the renminbi will only do more harm than good to our country, ‘’ he said.

In June 2018, President Donald Trump accused China of manipulating its currency lower for self-gain in exportation a statement which Li Keqiang dismissed on Wednesday saying, "The recent fluctuations in the renminbi exchange rate have been seen by some as an intentional measure on the part of China.’’

When the Yuan dropped in 2015 and 2016, Beijing spent a hundreds of billions to save it since many investors pulled out of China.

‘’China will work to create conditions for keeping the value of the yuan stable," Li said on Wednesday.

It is believed that China usually sets the value of its currency when trading with other countries with economists believing that the government efforts to drive it down against other currencies has fascinated more investors to own assets in US dollars.