- The Washington Times - Tuesday, August 6, 2019

China on Tuesday sharply criticized the Trump administration for “protectionist behavior” after the U.S. formally accused Beijing of manipulating currency, but also appeared to step back from declaring a full trade war was on the way.

The Chinese yuan, which the U.S. charged was being unfairly devalued to help Chinese exporters and frustrate new American tariffs stabilized Tuesday right around the sensitive 7-to-1 ratio to the U.S. dollar, after the central government allowed it to sink to an 11-year low the day before. U.S. stock markets, down sharply as the Washington-Beijing tensions soared Monday, recovered some of their losses on Tuesday on Wall Street.

But the Chinese government and state-supporting media made no secret of their unhappiness with President Trump’s renewed trade pressure after a brief lull earlier in the summer.

“The United States disregards the facts and unreasonably affixes China with the label of ‘currency manipulators,’ which is a behavior that harms others and harms oneself,” said the People’s Bank of China (PBOC) in a statement.

The central bank warned that Washington’s “wayward unilateralism” could produce fresh market turmoil and “seriously” undermine the international financial order.

China Daily, a state-run daily newspaper, accused Washington of “politicizing” the issue to “disrupt the normal order of international monetary governance.”

“It means Washington is willfully distorting its self-set rules to accuse other countries of something nonexistent and using that as an excuse to take actions against them,” wrote China Daily.

The official Xinhua news service said in an online editorial added, “The U.S. side should stop its ugly farce and bullying, and deal with China with a little more rationality and objectivity before the situation goes too far.”

China also went directly after Mr. Trump in its media campaign.

Many in Asia see the stepped-up complaints against China as part of President Trump’s 2020 campaign re-election strategy.

“Starting a currency war would seem a natural progression for Trump with trade negotiations having all but collapsed and his campaign for re-election next year already under way,” the South China Morning Post said in an opinion.

Several Chinese voices rejected the Trump administration’s claims that new weaknesses in the Chinese economy will soon force President Xi Jinping to sue for peace in the trade war.

“The U.S. side has intensified shots on China in many arenas. But the Chinese people, who have cast aside their illusions and stand ready to fight a protracted trade war with the United States, will not be intimidated,” said Xinhua. “The U.S. side should stop its ugly farce and bullying, and deal with China with a little more rationality and objectivity before the situation goes too far.”

Experts in the U.S. said the new currency accusations make it harder for the two sides to reach a compromise.

“Now that escalatory actions have been taken at the most senior levels of both governments, it’s not clear how either side stands down,” said Stephanie Segal, the deputy director of Simon Chair in Political Economy at the Center for Strategic and International Studies.

China’s Global Times writer Hu Weijia suggested the U.S. purposely labeled China as a currency manipulator to hinder China’s rise as a global economic rival.

But Mr. Hu said Washington may have overplayed its hand by “prompting China to make strategic adjustments” away from the U.S. economy and reducing its dependence on the dollar.

“The yuan’s sudden slump against the U.S. dollar on Monday seems to have exceeded U.S. expectations and triggered a hot debate among U.S. observers,” he said. “This suggests, China now has the initiative in the trade war and won’t be content to only play defense.”

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