China defends FX policies after Trump’s threat

China’s Foreign Ministry on Wednesday said the yuan’s exchange rate was not the reason for unbalanced trade ties with the United States, after Republican presidential candidate Donald Trump said he would label Beijing a currency manipulator.

Trump, the presumptive Republican nominee, has called China the “grand master” of currency devaluation, and has appealed to voters with tough talk on unfair trade deals, which he says cost American jobs.

In a Tuesday speech on his trade policy stances, Trump said that if elected, he would direct his treasury secretary to label China a currency manipulator, a move he said “should have been done years ago”.

Beijing has committed to continue “market-oriented exchange rate reform” of the yuan. Chinese officials have also said Trump’s trade policies are irrational.

“China-U.S. trade cooperation is the ballast and propeller of bilateral relations. Its essence is mutual benefit. The yuan exchange rate is not the reason for unbalanced China-U.S. trade,” Foreign Ministry spokesman Hong Lei said in a statement on its website responding to Trump’s comments.

“We hope some individuals on the U.S. side can objectively view China-U.S. trade relations, do more to benefit mutual trust and cooperation, and jointly safeguard the healthy and stable development of China-U.S. trade relations,” Hong said.

The United States’ goods and services trade deficit with China was $336.2 billion in 2015, according to the U.S. Trade Representative’s office.

The yuan is currently hovering near a 5-1/2-year low against the dollar.

The U.S. government has warned China that any reversion to its past exchange rate policy of keeping the yuan artificially low would trigger new U.S.-China tensions.

Chinese officials have generally avoided criticizing Trump directly, though they have made indirect criticism of his proposal to ban Muslims from entering the United States and of his claims that China is stealing U.S. jobs.