China is not manipulating its currency, but the yuan remains undervalued, the Obama administration told the US Congress in a report on Thursday.
However, US lawmakers did not agree with the conclusion that China is not manipulating its currency and reiterated their demand that the US initiate proceedings in this regard.
"What matters is how far and how fast the renminbi appreciates," Treasury Secretary Tim Geithner said in a statement after the release of the semi-annual report, which was delayed by three months. Renminbi is another name for the Chinese currency.
"We will closely and regularly monitor the appreciation of the renminbi and will continue to work towards expanded US export opportunities in China that support employment in the United States, in close consultation with Congress," Geithner said.
The report concludes that the renminbi remains undervalued. On June 19, China took the significant step of discontinuing its practice of pegging the yuan to the dollar and allowed its exchange rate to appreciate in response to market forces.
The decision was welcomed by the United States. However, the positive mood has turned to disappointment on account of the low appreciation of the yuan against the dollar, which some allege points towards currency manipulation. Influential Democratic Senator Sherrod Brown expressed his disappointment the administration did not label China a currency manipulator.
"Chinese currency manipulation undermines Ohio workers, Ohio manufacturers, and Ohio jobs. It's clear that the undervaluation of the yuan allows for cheap Chinese imports to undermine American-made products," he said.
"If the administration is serious about American manufacturing and boosting exports, we've got to make sure that our trading partners play by the same set of rules that we do," said Brown, who is considered one of Congress' leading voices on trade issues. He has repeatedly urged the administration to act on the devaluation of the Chinese currency.
