U.S. says China not currency manipulator
10/16/2009 Source: Xinhua
The U.S. government said on Thursday that China did not manipulate its currency against the U.S. dollar during the first half of 2009.
In its Semi-Annual Report to Congress on International Economic and Exchange Rate Policies, the Department of Treasury said that “no major trading partner of the United States” met the standards identified by a U.S. act of manipulating their rates of exchange against the U.S. dollar to gain unfair competitive advantage in international trade.
Based on a 1988 law, the Treasury is required to submit to Congress twice a year the report to identify whether its major trade partners manipulate their currencies to boost their exports to the United States or make U.S. products more expensive in overseas markets.
If China had been designated as a currency manipulator, it would trigger negotiations between the two countries and could lead to economic sanctions if the U.S. side took a case before the World Trade Organization.
The Treasury said that “China’s overall policies played an important role in anchoring the global economy in 2009 and promoting a reduction in its current account surplus.”
But it also alleged that the Chinese currency renminbi’s exchange rate showed a “lack of flexibility” in recent period.
The Treasury also claimed that it “remains of the view that the renminbi is undervalued.”
It said that the U.S. government will continue to work with China both in the Group of 20 (G20) and the bilateral Strategic and Economic Dialogue to pursue policies that permit greater flexibility of the exchange rate and lead to more sustainable and balanced trade and growth.
