In order for a country to be designated as a currency manipulator, it needs to meet three criteria set by the Treasury itself:

Significant bilateral trade surplus with the United States

Material current account surplus

Country engaged in persistent one-sided intervention in the foreign exchange market

Has the US Treasury set out evidence for China meeting each of these criterion?

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    Maybe I don't know something, but at what point US laws may be treated as applicable out of US borders? Isn't currency manipulations are the inner deal of each and every country? – user2501323 Aug 7 '19 at 8:43
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    @user2501323 I don't believe this does apply US law outside US borders. The US says "We will treat a country doing X as Y" it doesn't say another country can't do X, just that it will have consequences. The question as edited asks if there has been evidence presented that X has taken place. – Jontia Aug 7 '19 at 8:49
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    @Jontia, understand, thank you. Still impressed by law(or talks about law, don't remember) about applying US laws to non-in-US situation, or courting foreign countries. – user2501323 Aug 7 '19 at 8:55

It seems like an arbitrary decision, which isn't surprising given that the Trump administration refuses to abide by international norms and rules set by the WTO and other organizations going as far as to threaten them or obstruct them.

“Treasury has made what seems like an arbitrary determination of currency manipulation since China hardly meets all of the relevant criteria and despite the dilution of those criteria over time,” Prasad said.

It seems that there's no rule and arbitrary decisions can be made in such organizations such as the U.S. Treasury.


I'm not sure that the Treasury needs to; all of the data is easily publicly available. Let's take it from the top.

Significant Bilateral Trade Surplus

China has maintained a significant bilateral trade surplus with the United States for most of the last 10 years. See chart here. Now, there are definitely a few dips in here, and I don't know what a "significant" trade surplus is, but if I had to guess, that looks rather significant to me.

Material Current Account Surplus

China has kept a material current account surplus in 19 of the last 20 quarters. See chart here. Easily checked.

Country engaged in persistent one-sided intervention in the foreign exchange market

This was the big news headline that prompted the call to declare China a manipulator. For those reading this in the future (hi, future guy!), see articles like this one. China often changes the value of the yuan in order to drive its economy in the direction it wants, and it does so directly, rather than how the US would achieve something like this indirectly through quantitative easing, for example.

The real reason people are scratching their heads is: why now? As you can see from my data, none of this is new. China has been a currency manipulator for most of the last 5 years, and further beyond as well.

  • Persistent one-sided intervention means they keep devaluing or they keep supporting their currency. – hugin Aug 8 '19 at 12:36
  • The IMF’s spring edition of the World Economic Outlook projects the Chinese current account balance to be around 0.5% of GDP in 2019, enter negative territory in 2022, and stand at minus 0.2% by 2024. How is 0.5% of GDP a material current account surplus? – hugin Aug 8 '19 at 12:39
  • @hugin I think you're confusing what material means in this context. Anything more than 0% is "material." Anything 0% or below is "immaterial." Yes, 0.5% may sound low, but only a very small number of countries have above 0%. Only Germany and Russia have larger current account surpluses than China. – Michael W. Aug 8 '19 at 15:32
  • No, I think you've poorly researched the subject. "Treasury determines a country has a material current account surplus when its surplus is larger than 3 percent of that economy’s gross domestic product." Please correct the answer or retract it. – hugin Aug 8 '19 at 16:23

China's current account. China has had a current account surplus every quarter since the first quarter of 2018 and every year for at least the last twenty years.

I'm not going to try to work out if there is a source establishing that China's intervention in currency markets has been persistent and one sided. It is worth noting that this designation occurred right after China engaged in a large manipulation of their currency. And of course China has had a history of doing things like that.

If China thinks that it is being treated unfairly under United States rules, it could of course sue. That is the due process for executive actions. If the courts found that China was correct, they could block the designation.

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