April 17, 2014 08:21
The United States Treasury criticized China for "significantly" undervaluing its currency, but again refrained from labeling Beijing a currency manipulator.
In its twice-yearly report, the Treasury acknowledged that China's currency has appreciated. But it said the increase is too slow and has not gone far enough.
Beijing announced last month it would allow the value of the yuan to fluctuate more against the dollar -- a move welcomed by Washington.
However, the Treasury expressed concern about recent reports of Beijing's "heavy intervention" to keep the value of the currency low to gain trade advantages.
A weaker yuan makes Chinese goods cheaper for Americans and makes U.S. goods more expensive for Chinese, giving an advantage to Chinese exporters.
While the U.S. has consistently raised currency complains with China for years, it has not labeled China a currency manipulator since 1994.
The label could lead to trade sanctions and would provoke an angry response from Beijing.
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