Ministry of Commerce: China does not intend to use currency depreciation to promote exports

On November 10, the Ministry of Commerce held a regular press conference. Shen Danyang, spokesman of the Ministry of Commerce, said that maintaining the basic stability of the RMB exchange rate will help promote the development of foreign trade. The Chinese government has no intention of promoting exports through currency depreciation.

The total value of imports and exports in October dropped slightly

According to customs statistics, from January to October this year, the national import and export volume was 19.56 trillion yuan, down 1.9% year-on-year, of which exports were 11.22 trillion yuan, down 2.0%; imports were 8.33 trillion yuan, down 1.8%. In October, the total value of imports and exports was 2.05 trillion yuan, down 0.6%.

In addition, since August this year, the exchange rate of the RMB against the US dollar has been falling all the way. Some media have asked China's exchange rate depreciation to gradually weaken the effect of foreign trade. What comment does the Ministry of Commerce have on this?

In this regard, Shen Danyang pointed out that the appreciation of the exchange rate is not a decisive factor in exports. It is not necessarily the case in the global arena. The RMB exchange rate is also not the main factor affecting China's foreign trade. In recent years, with the deepening of exchange rate marketization reform, the two-way volatility of the RMB exchange rate has further expanded, and the role of the market in the exchange rate formation mechanism has been further developed.

"We have always stressed that exchange rate changes are a double-edged sword for foreign trade development. In the context of weak global economic recovery and increasingly complex monetary policy environment, maintaining the basic stability of the RMB exchange rate will help promote the development of foreign trade. In other words, The Chinese government has no intention to promote exports through currency depreciation," Shen Danyang said.

"The real effective exchange rate of the renminbi remains stable"

On November 10, the central parity of the yuan against the US dollar was adjusted to 53 basis points to 6.7885, a record low of more than six years. At the same time, the onshore renminbi against the US dollar closed at 6.7925, down 206 basis points from the previous trading day, approaching the 6.8 mark.

In this regard, Shen Danyang said that in the recent period, affected by the Fed’s interest rate hike expectations, the renminbi has depreciated against the US dollar in the short term, but two overall conditions must be seen. First, the changes in the bilateral exchange rate of the renminbi against the US dollar are in line with the changes in the direction of the other major currencies against the US dollar. Second, the renminbi has remained basically stable against a basket of currencies and the real effective exchange rate.

Shen Danyang cited a set of data: On October 31, the China Foreign Exchange Trading Center's RMB index for a basket of currencies was 94.22, which was basically the same as 94.72 on August 5. The latest data from the Bank for International Settlements also shows that the real effective exchange rate for the RMB in September was 121.24, which was basically the same as 121.74 in July.

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