The US’s move to label China as a currency manipulator “signifies the trade war is evolving into a financial war and a currency war,” and policy makers must prepare for long-term conflicts, said Chen Yuan, former deputy governor of the People’s Bank of China (PBoC), at a China Finance 40 meeting in Yichun, China, reported Bloomberg.
Former PBoC Governor Zhou Xiaochuan said at the gathering that conflicts with the US could expand from the trade front into other areas, including politics, military and technology. He called for efforts to improve the RMB’s global role to deal with the challenges of a dollar-denominated financial system.
The PBoC allowed the RMB to weaken below 7 to the dollar this week, prompting the US to accuse China of currency manipulation. President Donald Trump said talks with China planned for next month could be called off.
The US currency-manipulation charge is part of its trade-war strategy, and it’ll impact China “more deeply and extensively” than the trade differences, added Chen