Foreign and Military Affairs

China not currency manipulator: US Treasury

(Agencies)
Updated: 2010-07-09 07:07

WASHINGTON -- The Obama administration announced that it has decided not to label China a currency manipulator in a semi-annual currency report released Thursday.

"Treasury has concluded that no major trading partner of the United States met the standards identified in Section 3004 of the Act," the Treasury Department said in its semi-annual report sent to Congress on international economic and exchange rate policies.

The report noted that China'a announcement on June 19 to introduce more flexibility into the currency system is a "significant development." The yuan, has risen about 0.8 percent against the dollar since Beijing's June announcement.

US Treasury Secretary Timothy Geithner said the Obama administration will be watching the currency changes closely in coming months.

Geithner said. "We will closely and regularly monitor the appreciation of the renminbi and will continue to work towards expanded US export opportunities in China that support employment in the United States."

Some American manufacturers say the Chinese currency is undervalued by as much as 40 percent. They contend that this undervaluation is a key reason for America's huge trade deficit with China. They say it is also a factor in the loss of millions of American manufacturing jobs over the past decade.

However, many private economists argue that there are a variety of reasons for America's huge trade deficit with China. A change in the currency values would have only limited impact on the deficit, they say.