Chinese Premier Li Keqiang said in a forum today that the talk of China deliberately weakening the Yuan exchange rate was “groundless”. He added that “one-way depreciation of the yuan brings more harm than benefits for China.” Also, a weaker currency “will only come at a cost of damaging China’s economic environment”.
And he pledged that “China will never go down the road of relying on yuan depreciation to stimulate exports.” Instead, China would “tick to market-oriented foreign exchange reform”. But he also said, the currency would be kept “basically stable at an adaptive level”.
On US-China trade war, Li said “no unilateralism will offer a viable solution”. Instead, “it is essential that we uphold the basic principles of multilateralism and free trade.” He noted intellectual property theft would be “dealt with seriously” with “doubled or even tripled unaffordable penalties” for breaches in order to ensure firms are “comfortable” bringing their business to China.
Li also said China is “deeply integrated into the world economy, the Chinese economy is inevitably affected by notable changes in the global economic and trade context.” And he admitted that “we’re facing greater difficulties in keeping stable performance of the Chinese economy.” But he also indicated Beijing has “prepared sufficient tools for us to deal with risks and challenges” and added that “these policy tools will boost China’s resilience to cope with various challenges and difficulties.”