The US assertion that the recent depreciation of the Chinese yuan against the US dollar amounts to currency manipulation is not true, a US scholar has said, reports Xinhua.
It would be more correct to say that the Chinese authorities gave in to market pressure -- the immediate source of which was none other than US President Donald Trump's announcement of new tariffs on Chinese goods, said Jeffrey Frankel, professor of Capital Formation and Growth at Harvard University, in his signed article titled "The Currency Manipulation Game" published Friday on Project Syndicate website.
Trump tweeted on Aug 1 that he will place an additional 10 per cent tariff on the remaining 300 billion US dollars' worth of Chinese imports starting on Sept 1.
The task of evaluating whether US trading partners manipulate their currencies lies with the US Treasury Department, which uses three criteria.
Two of the three criteria coincide with internationally agreed yardsticks for manipulation under the Articles of Agreement of the International Monetary Fund: persistent one-sided intervention by the country to push down the value of its currency, and a large current-account surplus.
"Neither of these apply to China today," said Frankel, who previously served as a member of former US President Bill Clinton's Council of Economic Advisers.
The real significance of the US decision to label China a currency manipulator is that it represents a further escalation of the two countries' avoidable trade war, the US scholar said.