US declines to cite China as currency manipulator - Business - Boston.com: WASHINGTON (AP) — The U.S. government said Friday that China has made progress in allowing its currency to rise against the dollar and declined to accuse the nation of manipulating its currency to gain a trade advantage.
The decision issued by the Treasury Department Friday should help avert a potential trade dispute. But the department said China’s currency is still undervalued and must rise further against the dollar.
The yuan has gained 8 percent against the dollar in the past two years. A lower-valued currency gives China a trade advantage by making its exports cheaper and U.S. imports more expensive.
If the department found that China was manipulating its currency, the Obama administration would have had to initiate negotiations with China. If those talks failed, the U.S. could impose trade sanctions.
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