China will not stoop to competitive devaluation of its currency, Premier Li Keqiang stressed, hours after China hit back, with a softer punch than the one landed by the United States, in an escalating tariff war between the world’s largest economies.
Addressing a World Economic Forum event in the port city of Tianjin on Wednesday, Li did not directly mention the trade conflict but said talk of Beijing deliberately weakening its currency was “groundless.”
“One-way depreciation of the yuan brings more harm than benefits for China,” he said. “China will never go down the road of relying on yuan depreciation to stimulate exports.”
China will not do that to chase “thin profits” and “a few small bucks”.
Li went on to say that the world’s multi-lateral trading system should be upheld, and that unilateral trade actions will not solve any problems.
His remarks gave a lift to the yuan [CNY=CFXS], which has lost about 9 percent of its value since mid-April amid the ongoing trade war.
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