China not a currency manipulator, says US
The United States on Friday called on China to speed up progress in making its currency more flexible, but refrained from branding Beijing a currency manipulator, a move that could trigger sanctions.
In a long-delayed report to Congress, the US Treasury said it had concluded that China was allowing the yuan, or renminbi, to appreciate against the dollar and had shown willingness to continue promoting exchange-rate flexibility.
The Treasury Department cited "the ongoing appreciation of the renminbi against the dollar since June 2010" as well as "China's public statements asserting that it will continue to promote RMB exchange rate flexibility."
The Department also noted "China's recent policy commitments through the G20 and the US-China Strategic and Economic Dialogue to address external imbalances," the Treasury said in a statement.
"However, Treasury believes that progress thus far is insufficient and that more rapid progress is needed."
The renminbi was traded at 6.49 per dollar Friday, compared with 6.83 a year earlier, a 5.2 percent climb.
The Treasury's semi-annual Report to Congress on the currency practices of the country's major trading partners covers international economic and foreign exchange developments in the second half of 2010, and certain data and developments through April.
China has drawn sharp criticism from some US lawmakers who allege it keeps the yuan undervalued to gain a trade advantage.
If the Treasury report had agreed with that view, it would pave the way for US economic sanctions against Chinese imports.
The Treasury's report to Congress is required by law and was supposed to have been delivered by April 15, but was delayed to take into account high-level US-China talks in Washington the prior week.
Treasury Secretary Timothy Geithner has called the exchange rate situation with the Asian giant, controlled by the Communist Party, "the most important problem to solve in the international monetary system today".
The US-China Business Council welcomed the report, saying the Treasury Department "continues to make the right call on China's currency policy."
"Designating China as a 'manipulator' would achieve nothing," said council vice president Erin Ennis.
"USCBC believes that Obama administration's approach of employing multilateral and bilateral engagement with China is the most useful way to make progress on the exchange rate issue."
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