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US says China not manipulating currency
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China is not manipulating its currency to gain an unfair trade advantage, the U.S. Treasury Department said on Wednesday in a semiannual report to Congress.

"The Treasury concluded that neither China nor any other major trading partner of the U.S. met the requirements for designation as a "manipulator of their currency", the report said.

However, the report stated that the Chinese yuan remains severely undervalued against the U.S. dollar, and claimed that the recent movement of the yuan had been "too limited and modest."

The Treasury issues the report twice a year according to a 1988 law, which requires the department to analyze trading partners' foreign exchange policies and determine whether currency manipulation to gain an unfair trade advantage is occurring.

Under the law, economic sanctions can be imposed on countries found in violation of the law.

(Xinhua News Agency December 20, 2007)

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