WASHINGTON (MarketWatch) –- Treasury Secretary Timothy Geithner called for China to allow “significant, sustained appreciation” of its currency Thursday and said the Obama administration was exploring “what mix of tools” might encourage Beijing to allow the yuan to rise at a faster clip.

“China needs to allow significant, sustained appreciation over time to correct this undervaluation and allow the exchange rate to fully reflect market forces,” Geithner said in testimony prepared for the Senate Banking Committee. Geithner will also talk about the yuan with the House Ways and Means Committee this afternoon.

“It is past time for China to move,” Geithner said.

An undervalued yuan has helped China to boost exports and encouraged U.S. companies to outsource manufacturing to China from the U.S., Geithner said. He added that the yuan is held at a undervalued level by “heavy intervention” even as Chinese officials have pledged to allow the yuan’s value to be guided more by market forces.

Geithner’s comments coincided with another bullish day for Chinese currency on Thursday, even as the U.S. dollar remained strong against regional currencies. Recent appreciation of yuan during the past week reportedly been labeled by some analysts as a “mini revaluation.”

The People’s Bank of China set the mid-point for the yuan’s daily trading range at 6.7181 Thursday, compared to 6.7250 on Wednesday -- the fifth day running that the daily reference rate has been set a fresh record low against the dollar.

The dollar USDCNY, -0.00% was at 6.7248 yuan in late Asian trading, a rise of 1.03% during the past six trading days. The yuan extended its rise after the close of Asian markets with the dollar buying 6.7185.See Thursday’s currency report.

Japan's Currency Intervention

Geithner’s remarks didn’t address Japan’s currency market intervention on Wednesday, estimated at more than 2 trillion yen ($23.32 billion). Read more on Japan’s yen-selling intervention.

In Washington, many members of Congress demanding that China should face sanctions for its foreign-exchange policy.

Beijing said Thursday that a stronger yuan would do little to curb the U.S. trade deficit with China or resolve domestic U.S. problems such as persistently high unemployment.

Ministry of Foreign Affairs spokeswoman Jiang Yu told reporters in Beijing that if additional U.S. pressure is intended to help bridge the gap on trade issues, it may “rather may have the opposite effect.”

Jiang made the comment when questioned about Geithner’s statement that the yuan’s rise had been too slow. She also said the recent rise in the Chinese currency had nothing to do with U.S. political pressure.

Geithner is expect to be asked by U.S. lawmakers what new approaches should can be attempted as part of efforts to get China to allow its currency to strengthen. Lawmakers have reportedly lost patience in the standard White House approach of using quiet diplomacy to win Beijing’s cooperation on the currency issue. See full story on growing disillusionment among U.S. lawmakers on China’s currency policy

Some lawmakers have called for punitive action, including a law that would apply trade tariffs on Chinese imports.

Geithner did not allude to the trade bill specifically, but he said measures to pressure the Chinese could include the Treasury’s half-yearly foreign-exchange report, the next of which is due to be submitted to Congress in October.

“We will take China’s actions into account as we prepare the next foreign exchange report and we are examining the important question of what mix of tools, those available to the United States as well as multilateral approaches, might help encourage the Chinese authorities to move more quickly,” Geithner said.