China was quick to react. The nation’s central bank has released a statement
condemning the currency manipulator designation…. while state-run media have also called the
decision politically motivated. Kim Mok-yeon has more on that. A day after the U.S. announced it was officially
designating China a currency manipulator, the People’s Bank of China released a statement
denouncing the move. The PBOC expressed deep regret, calling the
decision a unilateral act based on protectionist principles that seriously undermines international
rules. It said the move will hurt the global economy,
and reiterated that the designation doesnt even meet Washington’s own standards of a
currency manipulator. In an editorial Tuesday, China’s state-run
daily tabloid Huanqiu Shibao called the decision a bluff, claiming China won’t be hurt much. It said that if it happened 2 years ago, it
might cause concern that Washington would increase tariffs on Chinese goods, but since
the Trump administration has enacted hefty tariffs already, the designation does not
mean a lot. It also said the U.S. is throwing a tantrum,
claiming that China meets only one of the three criteria for a currency manipulator,
which is that of having a significant trade surplus with the United States. The two other criteria set by the U.S. in
its law from 2015 are having a material global current account surplus and engaging in persistent
one-way intervention in foreign exchange rates. But the label announced on Monday was based
on an older law, namely the Omnibus Foreign Trade and Competitiveness Act of 1988 that
sets a looser standard for naming currency manipulators. Normally, if a country is found to be manipulating
its currency for a trade advantage, the U.S. Treasury is required by law to enter bilateral
negotiations with that country or work through the International Monetary Fund to correct
the situation. If no solutions can be found, the President
can impose various penalties such as banning the U.S. government from sending development
funds to that country, or excluding it from U.S. government procurement contracts. Kim Mok-yeon, Arirang news.