Jan 14, 2020

Why China is no longer a currency manipulator

Expand chart
Data: Investing.com; Chart: Danielle Alberti/Axios

China will no longer be labeled a currency manipulator, the Treasury Department announced, just two days before President Trump and Vice Premier Liu He are set to sign "phase one" of a long-awaited trade deal.

What happened: China was added to the list just five months ago after its government allowed the yuan to slip below a 7-to-1 dollar ratio for the first time in more than a decade.

Between the lines: The yuan lost value largely because of the Trump administration's trade war and threats of further escalation as China abandoned its efforts to hold that level.

  • It had been working to strengthen, rather than weaken, its currency in recent years.

Reality check: The change in designation also makes little sense given where China's yuan was trading before the label was applied and when it was removed.

  • The currency opened at 6.895 yuan per dollar on Aug. 2, the last trading day before the "currency manipulator" designation was made on Aug. 5.
  • It closed at 6.893 yuan per dollar on Monday when the label was removed.

Go deeper:

Go deeper

The "phase one" deal isn't all that it seems

Vice Premier Liu He and President Trump after signing phase one Wednesday. Photo: Mark Wilson/Getty Images

There was limited fanfare from the stock market after President Trump and Chinese Vice Premier Liu He signed the "phase one" trade deal yesterday.

What happened: The 94-page document will roll back some U.S. tariffs on Chinese goods and see China increase purchases of U.S. goods and services by $200 billion over two years, but it leaves more questions than answers, experts say.

Go deeperArrowJan 16, 2020

China's stocks plunge to 1-year low as coronavirus cases soar

An investor looks at a screen showing stock market movements at a securities company in Hangzhou in China's eastern Zhejiang province on Monday local time. Photo: STR/AFP via Getty Images

The Shanghai Composite lost nearly $370 billion from its market value and fell to a one-year low before easing slightly on Monday, per Reuters calculations.

Driving the news: Investors are concerned about the global impact of the deadly coronavirus outbreak, AP notes.

Go deeperArrowUpdated Feb 3, 2020 - Economy & Business

China to cut tariffs on $75 billion of U.S. goods

Chinese Vice Premier Liu He and President Trump at the White House on Jan. 15. Photo: Mark Wilson/Getty Images

China will halve tariffs on about $75 billion of imports from the U.S., effective Feb. 14, the country's finance ministry said in statements posted to its website Thursday.

Why it matters: This is another sign of tensions easing in the prolonged trade war between the U.S. and China that's brought major uncertainty to the markets and hurt the U.S. manufacturing industry and farmers.