US Wants China To Address Yuan Stability In Trade Deal
Ahead of the proposed discussion between United States and China to end the ongoing trade tariffs crisis the former has requested that China should first address the issue of its currency and determine its value as part of its trade deal. This move is aimed at mediating efforts by China to devalue its currency for countering American tariff say experts and US has also insisted that attempts made by China to devalue its currency and buoy its exports will lead to severe tariffs by USA. Now trade discussions by representatives of both nations have resumed which will be followed up with meetings by officers at higher level towards the end of the week.
Officials say that the previous deliberations from both sides that concluded in Beijing last week without any deal was not fruitless as it led to agreement on several contentious issues. Stocks in the US also gained traction after President Trump announced that March deadline for talks with China is not a the final data so it is likely that the cut-off could be adjusted. Meetings with top officials will be led by trade representative Robert Lighthizer of US who is a vocal advocate for pushing China to stop forced technology transfer and intellectual theft.
As on date the US dollar currently is worth 6.75 of Chinese yuan representing fall in value from its high of 6.9 yuan during November. To stabilize its currency China last year introduced a measure called “counter cyclical factor” or CCF to keep the currency’s midpoint fixed to a stable value in other words the People’s Bank of China will try to keep it stable irrespective of the market forces that are trying to pull the currency in different ways. In the past it has faced pressure from international agencies for carrying out unfair manipulation of its currency to suit its needs. In fact US economists have accused China of tampering with the value of its yuan to boost its exports.