The Washington Post reports: "China rebuked President Trump on Wednesday after he threatened to 'totally destroy' North Korea if necessary, a warning that may have undermined the chances of peace but also gave Beijing an easy opportunity to seize the moral high ground. Beijing has consistently blamed not just Pyongyang but also Washington for what it sees as its hostile policies toward the regime. It argues that U.S. hostility has helped to pushed North Korea's rulers into a corner and talk of total destruction only reinforces that narrative. 'Trump threatens DPRK with 'total destruction', while China calls for peaceful settlement,' the online English-language edition of the People's Daily newspaper headlined an op-ed... 'Trump's political chest-thumping is unhelpful, and it will only push the DPRK to pursue even riskier policies, because the survival of the regime is at stake,' it wrote. China's Foreign Ministry spokesman, Lu Kang, was more restrained, but nevertheless conveyed a similar message. In imposing economic sanctions on Pyongyang, the United Nations Security Council has agreed that the North Korea issue should be solved through 'political and diplomatic means,' he said."
CNBC reports: "The long-term battle on trade between the U.S. and China shows no sign of ending as a war of words ensued this week between the two. First, U.S. Trade Representative Robert Lighthizer called China an 'unprecedented' threat, because of the 'sheer scale of their coordinated efforts to develop their economy, to subsidize, to create national champions, to force technology transfer and to distort markets.' Then China countered, repeating its long-held stance that the bilateral relationship is good for both sides. 'The nature of China-U.S. trade relations is mutually beneficial,' said Lu Kang, a spokesperson for China's Foreign Ministry. 'China and the U.S. should work together to uphold authority of the WTO rules.' China refuses to be ruffled by what the U.S. has to say, as Beijing is more keen than ever to maintain stability ahead of a major leadership shuffle in a few weeks' time. But the U.S. doesn't look like it plans to simmer down anytime soon, especially as President Donald Trump is expected to visit China later this year and the two sides prepare to sit down at the negotiating table."
Council on Foreign Relations comments: "For the past fifteen or more years, if not longer, the flow of foreign exchange in and out of China has never quite seemed to balance. Either the yuan was a one way bet up, and the PBOC had to buy foreign exchange to keep the currency from appreciating, or the yuan was (thought) to be a one way bet down, and the PBOC had to sell a lot of foreign currency to keep the yuan from depreciating... In August, though—and frankly through most of the summer—the available evidence suggests that inflows and outflows almost perfectly matched. The stock of foreign exchange reserves reported on the PBOC's yuan balance sheet—which shows its stock of foreign exchange reserves at its historical purchase price—didn't move. And the numbers on foreign exchange settlement, which technically shows the flow of foreign exchange through the banking system but in practice tends to be dominated by the PBOC, show very modest net sales if you don't adjust for reported forwards, and small net purchases if you do... It is pretty amazing if you think about it. The PBOC supposedly thought flows were close to balance when it reformed its foreign exchange regime way back in August of 2015, but quickly discovered that the apparent balance hinged on expectations that the PBOC would keep the exchange rate constant. Those expectations, obviously, were disrupted by the August 2015 depreciation. Two years and a trillion or so in reserves later, and calm has been restored."