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Govt says China not manipulator but needs currency rise

May 10, 2006

WASHINGTON (Reuters) – 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.

Treasury’s decision was certain to anger lawmakers who
claim China is dragging its feet deliberately while flooding
U.S. markets with cheaply priced goods, but Treasury said
Beijing was moving, albeit too slowly, on currency reforms.

“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.”

China’s yuan currency is also known as the renminbi.

The Treasury ruling was in its twice-a-year report to
Congress on currency practices of key trade partners. It also
declined in its last report, on November 28, to call China a
manipulator and said it would keep pressuring China on
flexibility.


Source: reuters



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