The Chinese currency appeared on Tuesday at its highest level in more than two years against the American dollar, galvanized by the prospects for growth in China, while the world economy remains weighed down by the epidemic.

The yuan is not fully convertible and the country's central bank sets a central rate every day, on either side of which it allows a fluctuation of plus or minus 2%.

On Tuesday morning Beijing time, the currency was trading at 6.4381 to the dollar, up 0.34% from the previous day. This is its highest level since June 2018, just before the start of trade hostilities launched by the United States against China.

The Trump administration, which has in the past accused China of undervaluing its currency in order to gain unfair trade advantage, finally removed the country from its blacklist of manipulative states just a year ago. before the signing of a bilateral trade truce.

"The appreciation of the yuan reflects the resilience of the Chinese economy in the face of the pandemic [de COVID-19], but also in the face of the trade war" with the United States, underlines for AFP the analyst Rajiv Biswas, from IHS Markit.

The rise of the Chinese currency is also due to the general depreciation of the dollar against other currencies such as the euro and the yen, according to Mr. Biswas.

The first country affected by the new coronavirus at the end of 2019, China is also the first to have restarted its activity, thanks to strict movement controls, the general wearing of masks, containment measures and mobile phone tracking applications.

As a result, the Asian giant “will fundamentally remain the locomotive of the global recovery this year”, at a time when the main major economies, including the United States, remain penalized by the virus, assures analyst Ken Cheung, of the bank Mizuho.

China, which has largely contained the epidemic on its soil, should thus be one of the rare countries to announce positive growth in mid-January in 2020. And the market is "convinced" that it will remain "exceptional" in this regard. early 2021, according to Mr. Cheung.

“Viewed with a good eye”
The Trump administration, which holds China responsible for the huge US trade deficit, in 2018 embarked on a tariff war with Beijing.

The confrontation resulted in reciprocal surcharges on many goods which destabilized the world economy.

Because of these tensions, trade between the two powers has been reduced and the appreciation of the yuan against the dollar illustrates this phenomenon, according to Stephen Innes, analyst at broker Axi.

China's trade surplus with the United States, however, broke all records in November (+52% year on year), with strong demand for Chinese-made medical equipment, including masks, in the midst of the epidemic.

Exports are a mainstay of China's economy, but a stronger yuan has the effect of raising the dollar prices of Chinese goods, while American products become more competitive in the Chinese market.

However, Chinese productive sectors with low added value, such as clothing, face increasingly fierce competition from low-cost countries such as Vietnam and Cambodia, notes Mr. Biswas.

But in an “increasingly hostile” international context and an uncertain economic situation, Beijing now wants to refocus its economy on its domestic demand and “sees favorably” a strong yuan, believes Mr. Innes.

Especially since its imports, paid in dollars, of petroleum products in particular, automatically become cheaper.

And it wouldn't be surprising if the yuan's exchange rate reached 6.10 to the dollar this year, Cheung warns.