Hong Kong manufacturers are nervously waiting for the verdict of an April 15 report from the U.S. Treasury Department which may condemn China for depressing the value of the yuan and trigger sanctions against Chinese exports to the U.S., reports the South China Morning Post.
The Post reveals that Vice-Minister of Commerce Zhong Shan travelled to Washington last week to lobby US business leaders on the benefits to global trade of a stable yuan exchange rate and the risks of a trade war between the countries.
Caught in the middle of the verbal conflict are mainland-based Hong Kong manufacturers that export products to the U.S., says the Post.
"If China is found to be manipulating the currency, the US will impose punitive duties on imports," William Fung Kwok-lun, managing director of Li & Fung, told the Post. "It will become a trade war, which will have a disastrous impact on the trade industry."
U.S. economists have criticised China for undervaluing the yuan by as much as 40%, giving its exporters an unfair advantage.