China Not Labeled Currency Manipulator By U.S. Treasury Department

The U.S. Treasury Department repeated that China’s currency remains, “significantly undervalued” but declined again to label Beijing a currency manipulator.

In its semiannual report on global exchange rates, the Treasury says that Beijing has substantially reduced its market interventions to manage the value of its currency, the yuan, since the third quarter of last year, acknowledging the steps taken by Chinese officials to liberalize capital controls. The yuan has appreciated 12.6% against the dollar after adjusting for inflation in real terms since June 2010, the Treasury said in a news release.

The Treasury report, which is required by Congress, was originally scheduled to be released in October. It was delayed until after a series of scheduled international meetings and the U.S. presidential election. The report’s release is frequently delayed.  

Many U.S. unions and lawmakers have complained for years that Beijing manages the value of the yuan to keep it lower than it would be if determined by markets, making Chinese exports cheaper on world markets.

The Treasury in recent years under both Republican and Democratic administrations has declined to label China as a currency manipulator, with officials suggesting publicly and privately that such a step could only hurt efforts to encourage Beijing while gaining little in return. The last time the department made a formal designation was in 1994, where it cited China.