China should not extend the trade.......>

CHINA PRESS: China should not extend the trade disputes with the U.S. to a

"financial war" using financial tools to retaliate, stated Sheng Songcheng,

counsellor to the PBOC, according to Financial News on Monday.

  - China should not depreciate its currency because it will increase capital

outflow pressure, and intensify trade conflicts. He warned that as net export's

contribution to China's economic growth is limited, losses would outweigh gains

from the depreciation of the yuan. 

  - China should also not "let go of exchange rate" and let the yuan rise

significantly further, Sheng said. He said the yuan appreciation seen over the

last year was an adjustment to previous undervaluation by the market. China

should now avoid overvaluation of the yuan.