According to the IMF report, Chinas current account surplus as a share of gross domestic product (GDP) fell by about 1 percentage point to 0.4% in 2018, and is expected to remain at 0.5% in 2019. According to the assessment, Chinas external position in 2018 is basically in line with the medium-term fundamentals and the level of policy response.
James Daniel, Assistant Director of Asia-Pacific and Chief of China Affairs of the IMF, said in a media conference call the same day that the level of RMB exchange rate in 2018 was basically in line with the economic fundamentals, and there was no obvious overvaluation or undervaluation. He pointed out that Chinas current account surplus has been declining in recent years. The IMF supports China to enhance the flexibility of the RMB exchange rate, continue to promote Chinas economic transformation, expand opening up and promote structural reform.
Jeffrey Sachs, a professor at Columbia University, told reporters that the IMF report clearly shows that China does not have any manipulation of exchange rates. The U.S. Treasury Departments listing of China as a manipulator of exchange rates is based on President Trumps tweet rather than objective analysis, and is a arbitrary, capricious and politicized decision. He criticized the US side for abusing its position in the international financial and trade system and for taking irresponsible trade and financial measures against China.
The report also said IMF directors praised Chinas recent progress in reform, especially in reducing the vulnerability of the financial sector and continuing to open up the economy. They suggested that China continue to promote economic rebalancing, while adjusting its macroeconomic policies to cope with increased trade tensions. The directors welcomed the Chinese governments commitment to a multilateral and rule-oriented trading system and believed that Sino-US trade tensions should be quickly resolved through a comprehensive agreement.
According to Article 4 of the IMF Constitution, the IMF will send a working group to member economies every year to conduct research, to consult with member economies on macroeconomic policies and economic development situation, and to discuss with the Board of Directors of IMF decision-making bodies.
Chart: IMF reiterates that the RMB exchange rate is in line with Chinas economic fundamentals compiled by Xinhua News Agency reporter Lu Zhe
Pedestrians pass the headquarters of the International Monetary Fund (IMF) in Washington, USA, on August 9. Photographed by Liu Jie, Xinhua News Agency reporter