China's Yi: Envoys discussed avoiding currency as trade tool
Beijing: American and Chinese envoys discussed sticking to promises to avoid "competitive devaluation" to boost exports during negotiations aimed at ending a tariff war, China's central bank governor said Sunday.
Yi Gang gave no indication the two sides reached any agreements beyond previous commitments made at meetings of the Group of 20 major economies. He spoke at a news conference during the annual meeting of China's ceremonial legislature.
Yi took part in the latest round of talks in Washington, along with China's economy czar, Vice Premier Liu He, US Trade Representative Robert Lighthizer and Treasury Secretary Stephen Mnuchin.
"We discussed that both sides should abide by the commitments made at previous G20 summits, such as refraining from competitive devaluation and using exchange rates for competitive purposes," Yi said.
Negotiators also discussed "how to respect the right of each other's monetary authority in deciding its own monetary policy," said Yi.
He said they discussed the importance of "the principle of market-determined exchange rate regime." US and Chinese officials say the talks on ending the conflict over Beijing's technology ambitions are making progress but no formal agreements or details of negotiations have been released.
The complaint that Beijing depresses the value of its tightly controlled yuan to boost exports is one of a series of chronic irritants in the world's biggest trading relationship.
Washington has avoided labelling China a currency manipulator, which would trigger legal penalties. But US officials have pressed Beijing to allow the yuan to fluctuate more widely in response to market forces.
The Trump administration also is pressing Beijing for changes in industrial policy and the status of state-owned industry and a commitment to end cyberspying to obtain trade secrets.
The Chinese central bank has widened the band within which the yuan is allowed to fluctuate against a basket of currencies dominated by the dollar, but the maximum daily change is limited to 2 per cent.