US says China currency not ‘manipulated’ but severely undervalued

WASHINGTON, Dec 20, 2007 (AFP) – The US government declined to name China a currency “manipulator” but said in a report Wednesday that the Chinese yuan remains severely undervalued against the dollar. The Treasury, in a semiannual report to Congress, maintained its position that China should quicken its pace of economic reforms that would help lift the yuan’s value, but said there was no evidence of manipulation under US law.

“Treasury concluded that neither China nor any other major trading partner of the US met the requirements for designation” as a manipulator of their currency.

The conclusions allowed China to avoid a process that could trigger sanctions under US law.

The report acknowledged that the yuan, also known as the renminbi, appreciated against the dollar by 12.1 percent since a new currency regime was imposed in July 2005 that allowed it to trade in a wider range.

The Chinese currency rose by 2.5 percent in the first half of 2007 and another 3.2 percent in the second half through December 11. Against a broader range of currencies, the gain has been 3.8 percent since 2005.
Nonetheless, the report said China’s economic policies have led to a range of imbalances in the g