US: China not manipulating currency   (Agencies)  Updated: 2006-05-11 06:28  
The Bush administration on Wednesday announced it would not brand China as a 
country that was manipulating its currency to gain unfair trade advantages.  
Treasury's decision was certain to anger lawmakers who claim China is 
dragging its feet deliberately while flooding US markets with cheaply priced 
goods, but Treasury said Beijing was moving, albeit too slowly, on currency 
reforms. 
 
 
 
 
   Yuan notes at a branch of the China Minsheng Bank in Nanjing, 
 April 28, 2006. The Treasury Department ruled on Wednesday that China was 
 not a currency manipulator but pledged to 'actively and frankly' push 
 Beijing toward faster exchange-rate flexibility that would let its yuan 
 rise in value. [Reuters] |   
"Given our strong disappointment and the importance of China to the world 
economy, the Treasury Department will closely monitor China's progress in 
implementing its economic rebalancing strategy...and continue actively and 
frankly to press China to quicken the pace of renminbi flexibility." 
 The administration said in the latest currency report to Congress that it did 
not believe China technically met the definition in the law of a currency 
manipulator. 
 The report noted that China last July announced it was abandoning a fixed 
link of the yuan's value to the dollar, although since that time the yuan has 
risen in value by only about 3 percent. 
 "We are not satisfied with the progress made on China's exchange rate regime 
and we will monitor closely China's progress every step of the 
way," Treasury Secrectary Snow said. 
 The currency report, which the administration must present to Congress every 
six months, was delayed by a few weeks, until after Chinese President Hu Jintao 
and President Bush discussed the currency dispute during a White House meeting 
on April 20. 
 The administration had hoped that Hu would signal China would move faster to 
allow its currency to rise in value against the dollar, but no such announcement 
came out of the half-day summit. 
 A designation as a currency manipulator would trigger consultations between 
the two nations and could lead to trade sanctions if the United States won a 
case on the issue before the World Trade Organization. 
 The administration contends it can make more progress by lobbying China to 
make changes than by bringing a WTO case. It has been raising the issue with 
more intensity over the past three years.  
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