China is not manipulating its currency to gain an unfair trade
advantage, the U.S. Treasury Department said on Wednesday in a
semiannual report to Congress.
"The Treasury concluded that neither China nor any other major
trading partner of the U.S. met the requirements for designation as
a "manipulator of their currency", the report said.
However, the report stated that the Chinese yuan remains
severely undervalued against the U.S. dollar, and claimed that the
recent movement of the yuan had been "too limited and modest."
The Treasury issues the report twice a year according to a 1988
law, which requires the department to analyze trading partners'
foreign exchange policies and determine whether currency
manipulation to gain an unfair trade advantage is occurring.
Under the law, economic sanctions can be imposed on countries
found in violation of the law.
(Xinhua News Agency December 20, 2007)