China's exchange rate not cause of US high unemployment rate: ambassador

The high unemployment rate in the United States is not an outcome of China's trade surplus, or the renmibi exchange rate, Chinese ambassador to the United States Zhang Yesui said on Wednesday.

During an online interview with Xinhuanet, Zhang refuted the view that links the renminbi exchange rate with the US trade deficit and high unemployment rate.

“The trade imbalance between China and the United States has primarily resulted from the structural difference between the two countries’ trade and investment, and is an outcome of industrial division and transfer against the background of globalization,” said Zhang.

According to Zhang, China's exports are mainly labor-intensive products with a low added value, and since the United States stopped producing many of the products long ago, it has to import the products from either China or other countries.

“The appreciation of renmibi can neither eliminate the problem of US trade deficit, nor lower its high unemployment rate,” Zhang stressed.

He also said China does not seek the trade surplus. For example, the United States has a surplus in its service trade with China, and the foreign-funded enterprises, including the US ones, are the main beneficiaries of China's exports, he explained.

Furthermore, he noted that the choice of the exchange rate regime is within the sovereignty of a country, and should never be politicalized.

“China is responsible for its exchange rate policy,” Zhang said. “China is further reforming the mechanism forming its exchange rate, and will maintain an overall stability of its renminbi exchange rate at a reasonable and balanced level.”
(Source:xinhua)