User:Jacky Liang ljq/China and the International Monetary Fund

China and Article IV Obligations
China as a current member of the IMF, is bounded by the Articles of Agreement of the International Monetary Fund. However, whether China has fulfilled its obligations defined in Article IV of the International Monetary Fund with its exchange policies and arrangements remains debated. One common accusation is that Beijing manipulates the value of its currency, making the Renminbi undervalued, to gain unfair advantages in international trade. China denies such accusations and stresses its full conformity with the Article of the IMF. Some also find it challenging to prove Beijing policies' misalignment against the Article since intent has to be demonstrated as part of the requirement.

Relevance to the IMF
While some scholars also analyze the topic under the framework of the WTO and the GATT, it is commonly accepted that the IMF possesses the authority to determine foreign exchange matters. Article XV of the GATT affirmed:"'In all cases in which the CONTRACTING PARTIES are called upon to consider or deal with problems concerning monetary reserves, balances of payments or foreign exchange arrangements, they shall consult fully with the International Monetary Fund. In such consultations, the CONTRACTING PARTIES shall accept the determination of the Fund as to whether action by a contracting party in exchange matters is in accordance with the Articles of Agreement of the International Monetary Fund, or with the terms of a special exchange agreement between that contracting party and the CONTRACTING PARTIES.'"The Agreement Between the International Monetary Fund and the World Trade Organization also states that:"'The Fund shall inform in writing the relevant WTO body (including dispute settlement panels) considering exchange measures within the Fund's jurisdiction whether such measures are consistent with the Articles of Agreement of the Fund.'"Therefore, should the IMF decide that China follows the Articles, the WTO, including its dispute settlement bodies, will not be open to challenges on the issue.

US Accusation During the Trump Administration
On August 5, 2019, the U.S. Department of the Treasury designated China as a currency manipulator in a press release. The determination was made by the then-Secretary Mnuchin under the auspices of then-President Donald Trump. The press release also claimed that Mnuchin shall "engage with the International Monetary Fund to eliminate the unfair competitive advantage created by China's latest actions." On August 6, 2019, the People's Bank of China issued a statement, refuting the U.S. Treasury's designation of China as a currency manipulator, claiming that Renminbi's depreciation was the result of "shifts in market dynamics and volatilities in global foreign exchange markets amid global economic developments and escalating trade frictions."

On August 9, 2019, the IMF issued the 2019 Article IV Consultation for the PRC, in which it determined that the value of Renminbi in 2018 was "broadly in line with fundamentals and desirable policies," therefore essentially disputed the accusation raised by the U.S. during the trade conflict against China. James Daniel, the IMF's mission chief for China, also commented that Renminbi in 2018 was not significantly over-or undervalued.

On January 13, 2020, the U.S. Department of the Treasury removed China from the list of currency manipulator, on the eve of reaching a mutual trade deal.