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There is also no necessity for China to devalue its currency,
Pan Gongsheng, head of the State Administration of Foreign
Exchange, wrote in state magazine Qiu Shi.
The yuan slumped about 6.5 percent against the dollar last year
in its biggest annual drop since 1994. But since then, the yuan
has regained its vigour, rising 2.4 percent against the dollar
in the first half of 2017.
Faced with an entrenched bearish view on the yuan, Beijing moved
swiftly to flush out currency speculators, quash expectations of
a further steep depreciation and safeguard its reserves.
Data this week showed China's foreign exchange reserves rose to
$3.057 trillion in June. It was the first time the reserves had
climbed for five months in a row since June 2014.
U.S. President Donald Trump has also backed away from a campaign
promise to label China a currency manipulator. Under U.S. law,
labelling a country as currency manipulator can trigger an
investigation and negotiations on tariffs and trade.
Despite the yuan's strength, China's trade balance has stayed at
a surplus since March, indicating foreign demand for Chinese
goods remains positive.
"Capital outflows have eased markedly since the start of the
year and are now mostly offset by the trade surplus," Julian
Evans-Pritchard, China economist at Capital Economics, wrote in
a note on Friday.
"This should prove supportive of the renminbi (yuan) which we
think, contrary to the consensus, will strengthen against the
U.S. dollar during the next couple of years."
(Reporting by Ryan Woo; Editing by Christian Schmollinger)
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