In order to do so, according to the statement, the central bank reapplied to its model a “countercyclical factor.”

The tool, that was used previously to counteract market forces, essentially reasserted the central bank’s heavier hand in setting the currency’s value–and its renewed usage marks the latest in quickening steps to support the yuan.

Early this month, the central bank reimposed a yuan-trading requirement that made it costlier for investors to wager against the currency. According to Chinese officials and banking executives, Central-bank officials have also been warning commercial banks and other market participants against speculative trading in the yuan.

For most of the year, the PBOC has taken a more hands-off approach to the traditionally tightly tethered currency, even as the yuan dropped nearly 10% in value against the US dollar between April and mid-August.

The yuan’s slump is rekindling concerns among officials that businesses and individuals may rush to take money out of China. The Trump administration, meanwhile, suspects that China deliberately wants a weaker currency— to help exporters and ease the impact of tariffs. Trump has openly criticized Beijing for manipulating the yuan’s value this past week.

Eswar Prasad, a Cornell university economist stated that the policy shift “seems aimed at reducing the risk of speculative outflows and also deflecting criticism from Washington.”

The yuan’s slide against a strong dollar makes it one of the worst-performing currencies in Asia at the moment. It ended at 6.8789 per dollar Friday in mainland trading– close to its weakest level in a year.

In Friday’s statement, the China Foreign Exchange Trade System cited the strengthening dollar and the trade friction as the main reasons investors kept bidding down the yuan. The reapplication of the “countercyclical factor,” it said, could help the yuan remain largely stable.

This week, a fresh round of trade negotiations between the US and China governments failed to produce any visible signs of progress in settling the trade dispute.

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President Donald Trump had urged China to offer more at the bargaining table as the two countries prepared for their first major negotiation in more than two months– in an effort to avoid an all-out trade war.

“We’re talking to China, they very much want to talk,” Trump stated Thursday at a cabinet meeting at the White House. “They just are not able to give us an agreement that is acceptable, so we’re not going to do any deal until we get one that’s fair to our country.”

“It’s a good thing that they’re sending a delegation here — we haven’t had that in quite some time,” told Larry Kudlow, National Economic Council Director to the CNBC on Thursday.

“The Chinese government in its totality must not underestimate President Trump’s toughness and willingness to continue this battle to eliminate tariffs and non-tariff barriers and quotas to stop the theft of intellectual property and to stop the forced transfer of technology.” He added.

Kudlow further said the Chinese economy and currency “are slipping, as you all know, but let’s just see what happens.” He emphasised that discussions tend to produce better outcomes than expected—and that talking was always a better option.

This will be fourth round of formal talks since trade tensions flared this year, but the first session since early June.

“This will be ‘talks about trade talks,’” said Gai Xinzhe, an analyst at the Bank of China’s Institute of International Finance in Beijing. “Lower-level officials will meet and haggle and see if there is a possibility for higher-level talks.”

To restart trade negotiations with the U.S., China must offer a package of measures, according to Jacob Parker, the vice president for China operations for the U.S.-China Business Council in Beijing.

He stated that China needs to make a better offer that slashes the bilateral trade surplus, lowers import tariffs, provides better protection for intellectual property and stop forced technology transfers.

The two nations had seemingly appeared to have reached a deal in May after Chinese Vice Premier Liu He — President Xi Jinping’s top economic adviser — led a group of officials to Washington. But Trump backed away from the agreement soon afterward, and ever since the two sides have been locked in a standoff as they slapped tariffs on billions of dollars of each other’s goods.

The Trump administration already imposed duties on $34 bn of Chinese goods last month, a move that prompted immediate retaliation from Beijing. Levies on another $16 bn in goods take effect August 23.

The U.S. Trade Representative’s office stated on Thursday it had extended its public hearings on its proposal to impose tariffs on $200 bn of Chinese goods to six days starting August 20, from four days initially.

As many as 370 people are expected to testify. The tariffs that China has vowed to retaliate against by levying duties on $60 bn of U.S. goods, can take effect after a public comment period closes on September 6.

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January 27, 2017: Japanese Prime Minister Shinzo Abe said that he would keep pitching a multinational trade pact that US President Donald Trump’s administration has vowed to exit. Abe added that he would like to strengthen US-Japan ties as the new administration takes over.

“I believe President Trump understands the importance of free and fair trade. So I’d like to pursue his understanding on the strategic and economic importance of the TPP (Trans-Pacific Partnership) trade pact,” Abe told a session of parliament’s lower house.

Donald Trump took office on January 20 and his new administration’s strategy is to protect American jobs, which would start with the withdrawal from the 12-nation Trans-Pacific Partnership (TPP) trade pact.

Trump signed an executive order in the Oval Office pulling the United States out of the 12-nation TPP. “We’re going to stop the ridiculous trade deals that have taken everybody out of our country and taken companies out of our country,” the President said as he met union leaders in the White House’s Roosevelt Room. “Great thing for the American worker,” Trump said as he signed the order on his third full day in office. The Republican says the trade deal would have damaged US manufacturing.

The TPP has been signed by America but is yet to be ratified. On the other hand, Japan has already ratified the TPP while New Zealand is in the process of completing domestic procedures for the pact. During his campaign Trump sparked worries in Tokyo and the rest of the Asia-Pacific with comments which included a pledge to make allies pay more for the security provided by US forces and opposition to the TPP trade deal.

“The Japan-US alliance has been is and will be the cornerstone of our country’s diplomatic and security policies. This is an immutable principle,” Abe said in his policy speech at the start of the regular parliament session. “I am aiming to visit the United States as soon as possible to further fortify the bond of alliance together with new President Trump.”

Trump is also in the process of renegotiating the North American Free Trade Agreement (NAFTA) in an attempt to make it more favourable for America.

Neighbour Mexico is preparing to discuss changes to trade rules about a product’s country of origin to try to avoid a disruptive fight with the United States over commerce. Mexico sees possible common ground with US President Donald Trump on the ‘rules of origin’ of the NAFTA that binds the two countries and Canada.

Rules of origin are regulations setting out where trade products are sourced from. Although formal negotiations about NAFTA have not begun, the rules could eventually be altered to favour US industry over competitors from outside North America, particularly in Asia.

During his electoral campaign, Trump expressed his strong desire to scrap NAFTA as he felt that the agreement was much more beneficial to other parties and not the US.

Mexican President Enrique Pena Nieto planned a visit to the US to discuss these developments. However, on Thursday Trump asked his Mexican counterpart to stay at home if Mexico is not willing to pay for the wall along their border that the US President plans to build.

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