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China to keep 'prudent' monetary policy amid trade war


AFP Beijing
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 USD 200 billion in Chinese goods on Monday, with Beijing targeting USD 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 USD 250 billion in Chinese goods, has threatened to strike at another USD 267 billion -- essentially hitting all Chinese exports.
China would struggle to keep up with tariffs as it imported only USD 130 billion in American goods last year. It has so far imposed tariffs on USD 110 billion in products from the United States.

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First Published: Sep 29 2018 | 7:50 PM IST

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