Chinese Officials Assure Lew There's No Plan to Devalue Yuan

Jack Lew: Renminbi Has to Go Up and Down With Markets
  • China's policy makers restated plans to rebalance economy
  • U.S. economy `is continuing to do pretty well,' Lew says

China’s officials said there is no intention or need to devalue the yuan, according to U.S. Treasury Secretary Jacob J Lew, who was speaking at a briefing in Hong Kong after Monday meetings with Premier Li Keqiang in Beijing.

QuickTake The People’s Currency

Policy makers in China restated plans to rebalance the economy and cut excess capacity, and said they have the policy tools -- monetary, fiscal and structural -- to do the job, Lew said Tuesday. He discussed with them the need "for clear communication and frequent communication."

"We continue to look forward to there being an orderly transition in China," Lew said.

Concerns over China’s economic trajectory deepened Tuesday as a report showed the official factory gauge extended its stretch of deteriorating conditions to a record seven months while a measure of services fell to the weakest in seven years. The readings underscore the challenge for policy makers as they seek to cut overcapacity in manufacturing without derailing growth.

At the Group of 20 and in his bilateral meetings, China gave "a strong commitment to staying on a path to rebalancing the economy and implementing the kinds of reforms that are necessary to achieve that, including reforms to reduce excess capacity," Lew said.

A new commitment to consult on currency policy that was agreed by the Group of 20 meetings in Shanghai on Feb. 27 was "very important" and reduces the risk of competitive foreign exchange devaluations, Lew said.

Lew also expressed confidence in the world’s largest economy.

"The real economy in the United States is continuing to do pretty well," he said.

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