China to keep ‘prudent’ monetary policy amid trade war

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BEIJING, Sept 29, 2018 (BSS/AFP) – China’s central bank said Saturday it will
maintain its “prudent and neutral” monetary policy while keeping an ample
level of liquidity amid a trade war with the United States.

The yuan’s exchange rate and market expectations remain generally stable,
giving the world’s second largest economy a stronger ability to counter
external shocks, the People’s Bank of China said after its third-quarter
monetary policy committee meeting, according to the official Xinhua news
agency.

Amid warnings about China’s massive debt mountain, the bank said it will
“guide reasonable growth in credit” and continue to deepen financial reform.

China has been locked in an intensifying trade conflict with the US, which
unleashed a new wave of tariffs on $200 billion in Chinese goods on Monday,
with Beijing targeting $60 billion in American products in response.

Premier Li Keqiang acknowledged last week that China is facing “greater
difficulties” in maintaining steady growth in the face of the US onslaught,
but he voiced confidence in its ability to “overcome obstacles”.

Analysts say a sharp depreciation of the yuan has helped China weather the
tariffs storm by making its exports cheaper.

But Chinese officials have rejected accusations that Beijing is
manipulating its currency.

US President Donald Trump, who has now hit $250 billion in Chinese goods,
has threatened to strike at another $267 billion — essentially hitting all
Chinese exports.

China would struggle to keep up with tariffs as it imported only $130
billion in American goods last year. It has so far imposed tariffs on $110
billion in products from the United States.

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