US steps back from labelling China a currency manipulator

Feb 4, 2011, 22:54 GMT

Washington - The US Treasury stepped back from labelling China a currency manipulator in a semi-annual report to Congress, but warned Friday that the emerging Asian power's progress in letting its yuan appreciate remained 'insufficient.'

The report's much-anticipated release was twice delayed last year as President Barack Obama's administration weighed new signals from China, which in June said it would give up the yuan's peg to the dollar.

Some US lawmakers had called on the Treasury to officially label China as a manipulator of its currency, which would have prompted Congress to consider punitive tariff measures in response.

The US and Europe have long accused China of artificially holding down the value of the yuan in order to boost exports abroad. China has said it is willing to allow a slow appreciation, but warned that any quick changes would destroy its economy.

The Chinese yuan has appreciated by about 3.7 per cent against the dollar since June, according to the Treasury.

That rise, coupled with a commitment to 'intensify' the process made by Chinese President Hu Jintao during a Washington visit last month with Obama, had convinced the Obama administration to keep the Asian power off its list of currency manipulators.

'Treasury's view, however, is that progress thus far is insufficient and that more rapid progress is needed. Treasury will continue to closely monitor the pace of appreciation,' the report said.

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