The US Treasury Department today released its semiannual Report to Congress on International Economic and Exchange Rate Policies, notably choosing not to label China a currency manipulator. The report stated the renminbi (RMB) has appreciated by 9.3 percent, and 12.6 percent at an inflation-adjusted rate, since June 2010. However, Treasury characterized the RMB as remaining "significantly undervalued" and emphasized that "more progress is needed" to effectively address currency undervaluation.

Treasury's previous exchange rate report, issued in May, also did not cite China as a currency manipulator. Since 2005, China's exchange rate has appreciated approximately 30 percent versus the US dollar.

The US-China Business Council's (USCBC) long-standing position is that China should move faster to implement the financial sector reforms needed to remove capital controls and have a fully market-driven exchange rate. USCBC supports the Obama administration's efforts to work with China on adopting these reforms. USCBC opposes legislative proposals in Congress that would impose tariffs based upon highly subjective estimates of the "true" exchange rate.

Section 3004 of the Omnibus Trade and Competitiveness Act of 1988 requires Treasury to report semi-annually to Congress on other countries' exchange-rate policies. According to the Act, Treasury must pursue negotiations at the International Monetary Fund or through a bilateral forum with any country it labels a currency manipulator. China was last listed as a currency manipulator in 1994 under the Clinton administration.