China has assured that it will not pursue a currency war and that it will instead focus on carrying out more reforms to ensure a market-based mechanism for the renminbi, US Treasury Secretary Jack Lew said.
Lew reckoned that the G20 finance ministers meeting that took place last weekend in Shanghai has greatly reduced the risks of competitive devaluation of currencies globally, as a communiqué released by the group has added a new commitment on the issue.
According to the Hong Kong Economic Journal, Lew said that Beijing had reassured him that China has no intention, or the need, for further devaluation of the renminbi.
China devalued the renminbi by 2 percent on Aug. 11 last year, rattling global financial markets.
The currency has depreciated 5.5 percent onshore since then, based on the closing price on Tuesday. The unit lost as much as 6.2 percent in value at one point before recovering some ground.
Speaking to reporters in Hong Kong after his trips to Shanghai and Beijing, Lew said that he sensed a strong commitment from China to rebalance its economy by undertaking necessary reforms, including a reduction in industrial overcapacity.
China is using structural and monetary policies to smoothen the transition of its economy, Lew said.
In other comments, Lew said that Hong Kong has a significant role in the global economy as it serves as a link between the world’s top two economies, namely the US and China.
On Tuesday, Lew met with top Hong Kong officials, including Financial Secretary John Tsang and Chief Executive Leung Chun-ying, as well as prominent business leaders and economists from the city.
Lew arrived in Hong Kong after attending the G-20 Finance Ministers and Central Bank Governors Meeting in Shanghai over the weekend.
During the meetings with Hong Kong officials and business leaders, Lew discussed the recent developments in the global economy as well as expectations for growth in the Hong Kong economy over the short and medium term.
He also discussed developments in mainland China and their potential impact on Hong Kong.
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