The United States did not designate China as a currency manipulator on Friday, as the Treasury Department released its first foreign exchange report of President Joe Biden's administration.
China remained on the watch list over its currency practices. The report, which is typically issued twice a year, said: "China's failure to publish foreign exchange intervention and broader lack of transparency around key features of its exchange rate mechanism and the activities of state-owned banks warrant close monitoring of renminbi developments."
Treasury Secretary Janet Yellen said at her confirmation hearing in January that she would work to fulfil Biden's promise to "oppose any and all attempts by foreign countries to artificially manipulate currency values to gain an unfair advantage in trade".
"By not labelling China, it is not necessarily an olive branch to Beijing because it appears from news reports that the Biden administration is still going to push a harder agenda with China, but I do think that they didn't want to antagonise right out of the gate," said Brady Mills, a lawyer who focuses on unfair trade investigations at the firm of Morris, Manning & Martin in Washington. "And also the [yuan] has appreciated significantly in 2020 against the dollar, so I think that's also an important factor that they took into account."
The Chinese yuan has strengthened 8 per cent against the US dollar in the past year.
The report added Taiwan to its watch list but did not designate it as a currency manipulator. The Taiwan dollar gained 5.6 per cent against the US dollar in 2020. Taiwan's central bank said last month that a large spike in its currency intervention spending last year may have put the island in Washington's crosshairs.
Read the full article, from the South China Morning Post, here.
