US labelling China currency manipulator is ‘absurd’, threatens global recession, warns adviser
- Yu Yongding, a fellow at the Chinese Academy of Social Sciences, said that the ‘US is trying to start a currency war’
- US Treasury Department made the decision after the yuan weakened below 7 to the US dollar on Monday
China being labelled a currency manipulator by the United States is “absurd” and “ridiculous” and increases the risk of a global recession, as the trade war evolves into a currency war, according to a senior Chinese government adviser.
“There’s a risk of a global economic recession even without the trade war, and an escalation of the trade war certainly amplifies such risks,” Yu Yongding, a fellow at the Chinese Academy of Social Sciences, told the South China Morning Post.
Yu, is consulted by Beijing on exchange rate policy, said the US decision was “absurd”. “It’s ridiculous to label [China] a currency manipulator simply because of one small exchange rate change in one trading day,” he added. “The US is trying to start a currency war, and it has rushed to find an excuse [to do so].”
The US Treasury Department justified its decision by citing China’s “concrete steps” in recent days to devalue its currency while maintaining substantial foreign exchange reserves.