TheÂ Chinese yuan is strengthening midweek against its American counterpart, despite warnings from officials about theÂ national economy. TheÂ Chinese economy was aÂ key subject ofÂ discussion atÂ this yearâs annual World Economic Forum (WEF) inÂ Tianjin. This comes asÂ theÂ worldâs two largest economies slapped tariffs onÂ both ofÂ their exports onÂ Tuesday.
Speaking atÂ theÂ WEF, Chinese Premier Li Keqiang explained that theÂ government understands that theÂ nation faces aÂ wide array ofÂ economic challenges andÂ difficulties. Li noted that because China is ingrained inÂ theÂ global economy, it is impacted byÂ international trends.
Deeply integrated into theÂ world economy, theÂ Chinese economy is inevitably affected byÂ notable changes inÂ theÂ global economic andÂ trade context. Indeed, we’re facing greater difficulties inÂ keeping stable performance ofÂ theÂ Chinese economy.
While China faces aÂ tough economic situation, Li revealed that his country is still comfortable with theÂ current developments. He added that theÂ government andÂ theÂ central bank have policy tools aimed toÂ âboost Chinaâs resilience toÂ cope with various challenges andÂ difficulties.â
TheÂ second-in-command insisted that theÂ country will not devalue its currency during its trade dispute with theÂ US. AÂ weaker currency will make exports cheaper, something that President Donald Trump andÂ his administration accused Beijing ofÂ doing, which Trump contends ârips offâ theÂ US.
Recent fluctuations inÂ theÂ renminbi exchange rate have been seen asÂ anÂ intentional measure, but that isnât true. One-way devaluation will do more harm than good toÂ Chinaâs economy. China will byÂ no means stimulate exports byÂ devaluing theÂ yuan.
Experts believe that theÂ yuan has likely bottomed out, andÂ that it will maintain aÂ sideway direction forÂ months because central bank measures will offer support, but global uncertainties andÂ volatilities will affect theÂ yuan.
TheÂ USD/CNY tumbled 0.16% toÂ 6.8504, from anÂ opening ofÂ 6.8612, atÂ 16:36 GMT onÂ Wednesday. TheÂ EUR/CNY was unchanged atÂ 8.0057.
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