China never engages in competitive currency devaluation, says PBOC
The People's Bank of China says it has never used competitive devaluation to boost exports, arguing global imbalances require collective action and structural reforms by all nations.
The People's Bank of China (PBOC) has issued a statement on its renminbi exchange rate policy, emphasising that China has never engaged in competitive currency devaluation nor deliberately weakened the renminbi to boost exports. The central bank said China's trade development stems from improvements in industrial competitiveness, and that it sees no need or intention to gain a trade advantage through exchange rate manipulation.
In the statement, the PBOC noted that past episodes of renminbi appreciation did not hinder China's trade growth, while periods of depreciation did not lead to a faster increase in China's export market share. It added that the sensitivity of China's trade to exchange rate movements has declined significantly in recent years.
The PBOC argued that global economic imbalances are closely linked to the evolution of the global division of labour, inherent contradictions in the international monetary system, and persistent high fiscal deficits and consumption in some countries. It said these issues require joint efforts by all parties to resolve. The bank criticised attempts to attribute declining industrial competitiveness, weakened fiscal constraints, and complex structural problems in other countries to exchange rates, calling this a shirking of responsibility for domestic adjustments.
The central bank also highlighted the enormous scale of the global foreign exchange market, saying it is difficult to sustain intervention and influence exchange rates. It added that international methods for assessing equilibrium exchange rates remain immature, and that using such assessments as official evidence of renminbi undervaluation represents a distortion and misuse of those evaluations.
Noting that the US dollar index and US Treasury yields have risen rapidly this year, causing widespread depreciation of non-dollar currencies, the PBOC said the renminbi has continued to appreciate against the dollar. It stressed that future factors influencing the renminbi exchange rate are diverse and that uncertainty remains.
The PBOC reiterated that alleviating global imbalances requires collective action by all countries through structural reforms. It said China is actively promoting the transformation of its economic growth model to foster a more open, inclusive, and balanced global economy.