China will not resort to currency devaluation in order to boost exports, Premier Li Keqiang said on Wednesday, even as Beijing faces mounting economic challenges amid an escalating US trade war.
Addressing a World Economic Forum event in Tianjin, Li did not directly mention the trade conflict with Washington but said talk of Beijing deliberately weakening its currency was “groundless”, Reuters reports.
“One-way depreciation of the yuan brings more harm than benefits for China,” the premier was quoted as saying. “China will never go down the road of relying on yuan depreciation to stimulate exports.”
Beijing will not engage in renminbi devaluation to chase “thin profits” and “a few small bucks”, Li said.
The comments came a day after China imposed new tariffs on US$60 billion worth of American goods, retaliating against the US after the Trump administration slapped fresh duties on Chinese products.
Li, in his speech Wednesday, said the world’s multi-lateral trading system should be upheld, and that unilateral trade actions will not solve any problems.
In related news, People’s Daily, the Communist Party mouthpiece, wrote on Wednesday that China remains unafraid of the “extreme measures” taken by the US.
“To deal with the trade war, what China really should do is to focus on doing its own thing well,” the newspaper said in a front-page article in its overseas edition.
China is not worried that the US trade counter measures will raise domestic commodity prices by too much but will instead use it as an opportunity to replace imports, promote localisation or develop export-oriented advanced manufacturing, the article said.
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