US Treasury: China not manipulating, but yuan is still undervalued

THE US Treasury has again failed to support constant charges that China is manipulating its currency while at the same time conceding that the yuan is still "significantly undervalued".

"The Chinese authorities have substantially reduced the level of official intervention in exchange markets since the third quarter of 2011, and China has taken a series of steps to liberalise controls on capital movements, as part of a broader plan to move to a more flexible exchange rate regime," said the US Treasury statement.

The report also noted that the value of the yuan had risen 12.6 per cent against the US dollar since June 2010, substantiating China's position that it had reduced intervention in foreign exchange markets.

Said a Chinese foreign ministry spokesman: "We hope that the US side can appropriately deal with trade and economic issues, including the renminbi exchange rate."