TOKYO – Chinese President Xi Jinping is having a be-careful-what-you-wish-for moment as a rising yuan threatens his ability to achieve a 5.5% gross domestic product (GDP) growth target for 2022.
On Friday, the People’s Bank of China (PBOC) took an abnormally bold step to weaken exchange rates through the currency fixings process. It’s the clearest sign yet that Xi’s inner circle is worried a strong yuan is imperiling China’s economic trajectory.
It also may herald the end of a recent era of yuan advances.
Then-US president Donald Trump was obsessed with the yuan-dollar rate, which he argued was kept artificially low by Beijing and thus “killing” American companies and workers through low-cost imports.