In early August, the renminbi’s exchange rate broke through the psychological threshold of CN¥7 per United States (US) dollar. While investors were still digesting the full significance of this event, US President Donald Trump’s administration startled the market by labelling China a “currency manipulator.”The designation is absurd, to say the least, because China doesn’t meet the US government’s own criteria for being a currency manipulator.
China’s economic performance in 2018 was rather disappointing. According to official statistics, the country’s growth rate up to the end of the third quarter was 6.7 percent, the lowest since the global financial crisis. The real situation was probably even worse.A lack of progress on institutional reform, together with obstacles to structural adjustment, have been fuelling doubt among many foreign and domestic observers about China’s growth prospects.