MNI POLICY: China Says No Competitive Devaluation

     BEIJING (MNI) - China's Ministry of Commerce stressed on Thursday the

country will not carry out a competitive devaluation of the yuan in response to

the trade war with the U.S. or other "external disturbances."

     Here are main points from the ministry's press conference:

     --"China will stick firmly to deepening market-based FX reform, continue to

improve the managed floating exchange rate system that is based on market demand

and supply and adjusts according to a basket of currencies," ministry spokesman

Gao Feng told a weekly press briefing. He added that authorities will maintain

the yuan basically stable on a reasonable and balanced basis.

     --China hopes other countries will not politicise the FX issue, and will

obey market rules, Gao stressed, in response to a reporter's question regarding

comments by U.S. Treasury Secretary Steven Mnuchin, who said that he is open to

changing how the U.S. determines which countries are manipulating their

currencies.

     --Cooperation between China and Japan in third countries' markets has

become a new economic growth driver, Gao said, as Japanese Prime Minister Shinzo

Abe arrived in China today, the first visit by a Japanese leader in seven years.

Companies in both countries are willing to cooperate in other markets, Gao said.

     --Negotiation is a mutual process, and not meant to tackle one side's

concerns alone, Gao stressed in response to White House Chief Economic Adviser

Larry Kudlow's argument that China should decide how to respond to a detailed

list of U.S. economic demands.

     --Some 180 American companies will participate in China's first

International Import Expo in November, the third most among participating

countries, Gao said, adding China is willing to share growth opportunities and

achieve mutually beneficial outcomes for companies from all countries including

the U.S.

     --China is updating a new negative list for foreign investment which is

expected to be announced and implemented nationwide later this year, Gao said.

The revised version of the negative list, which will ease restrictions for

foreign firms, has been submitted to the central government for final approval.

China will build a system to update changes to the list in real time, the

ministry said.

     --China will keep policies for foreign investment and the business

environment stable and predictable. "We will continue to reduce restrictions on

foreign investment ... and make China continue to be the most attractive FDI

destination for foreign investors," he said.

--MNI Beijing Bureau; +86 (10) 8532-5998; email: iris.ouyang@marketnews.com

--MNI London Bureau; +44208-865-3829; email: Jason.Webb@marketnews.com

[TOPICS: M$A$$$,M$Q$$$,MGQ$$$]