The US Treasury cleared China of official accusations of currency manipulation Friday, but said progress toward allowing the yuan to appreciate was “insufficient.”
In a report to Congress, the Treasury said that China, eight other countries and the eurozone had not manipulated exchange rates “for purposes of… gaining unfair competitive advantage in international trade.”
“Based on the resumption of exchange rate flexibility last June and the acceleration of the pace of real bilateral appreciation over the past few months,” China’s behaviour did not qualify under the official definition of manipulation, it said in the long-delayed report.
“Treasury’s view, however, is that progress thus far is insufficient and that more rapid progress is needed.” It pledged to “continue to closely monitor the pace of appreciation” of the yuan.
In addition to China, the Treasury looked at the policies of the eurozone and eight other economies: Brazil, Britain, Canada, Japan, Mexico, South Korea, Switzerland and Taiwan. The 10 together account for about 75 percent of US trade.