Trump contrasts with the US Treasury on the Chinese currency

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WASHINGTON (Reuters) – US President Donald Trump’s tirade over China’s accusation of engaging in “devaluation” contradicts the recent conclusion of the US Treasury Department.
“China and Russia are playing the devaluation game while the United States keeps the currency going,” Trump said in a tweet on Twitter on Monday.
Trump contrasts with the latest report issued by the US Treasury Department on Friday and does not accurately reflect the economic situation.
In its report, the Treasury Department denied any major trading partner, including China, was manipulating its currency.
“No business partner has been found to meet the legislative criteria for currency manipulation during the current reporting period,” the department said in its semi-annual report to Congress on international economic and exchange rates.
“The watch list includes China, Japan, South Korea, Germany, Switzerland and India,” according to the report.
“China is the most successful example of restoring the post-crisis external balance between the major surplus economies,” the report said.
China’s current account surplus was only 1.4 per cent of GDP in the second half of 2017, down sharply from a peak of more than 10 per cent of GDP in 2007.
The RMB appreciation in 2017 helped reduce China’s trade surplus with the United States, according to the report.
The Treasury said it attached “great importance” to China’s adherence to its G-20 commitments to refrain from engaging in a competitive reduction and not targeting the Chinese exchange rate for competitive purposes.
While China has pushed market-oriented reforms toward its foreign-exchange mechanism, the renminbi has been largely in line with fundamentals in recent years, as many economists and institutions have pointed out.

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