China News Service, July 23. According to the website of the Ministry of Commerce, the head of the Trade Remedy and Investigation Bureau of the Ministry of Commerce made a statement at the request of the US’s first investigation into the so-called “renminbi exchange rate undervaluation” in the anti-subsidy case against China. The person in charge pointed out that China has noticed that for the first time, the US Department of Commerce has initiated an investigation into the so-called "RMB undervaluation" project in an anti-subsidy case. China firmly opposes this and urges the US to abide by existing international rules and stop anti-subsidy investigations on the so-called "undervaluation of the RMB exchange rate."

  A reporter asked: Recently, the U.S. Department of Commerce decided to initiate an anti-dumping and countervailing investigation on cable ties products originating in China, and launched an investigation against the so-called "RMB undervaluation" item in the countervailing procedure. What's the comment from the Ministry of Commerce?

  The person in charge stated that China has noticed that the US Department of Commerce has initiated an investigation into the so-called "RMB undervaluation" project in an anti-subsidy case for the first time. China firmly opposes this.

  The person in charge pointed out that China implements a managed floating exchange rate system based on market supply and demand, adjusted with reference to a basket of currencies, and the market plays a decisive role in the formation of the exchange rate. In general, the RMB exchange rate is at a reasonable equilibrium level and has not been underestimated. Since 2005, the RMB has appreciated more than 17% against the US dollar. According to data released by the Bank for International Settlements, from the beginning of 2005 to May 2020, the nominal effective exchange rate of RMB has appreciated by 38% and the actual effective exchange rate has appreciated by 49%. The strongest currency in the group economy is also one of the currencies with the largest appreciation in the world.

  The person in charge emphasized that the exchange rate issue is beyond the authority of a member to conduct countervailing investigations in accordance with WTO rules. The United States revised its regulations in February this year to conduct anti-subsidy investigations on the exchange rates of other countries. It has been suspected of violating WTO rules and has been opposed by many quarters. Even in accordance with U.S. regulations, the applicant’s complaint contained a large number of errors, and did not possess the necessary elements for countervailing such as financial assistance, benefit granting, and specificity. China urges the US to abide by existing international rules and stop anti-subsidy investigations into the so-called "undervaluation of the RMB exchange rate."