The US Treasury said it would release today a semi-annual currency report that angry critics in Congress say ought to label China a "manipulator" of its exchange rate.
The report on global exchange-rate policies will be published today, Treasury spokesman Tony Fratto said on Monday.
The yuan held weaker than eight to the dollar before the release of the report.
The yuan was at 8.005 per dollar as of 3:30pm in Shanghai from 8.007 yesterday, according to data compiled by Bloomberg.
It has never breached 8 since the decade-old peg was abandoned.
The report is required twice a year under US trade law.
In November, the Treasury stopped short of labeling China a currency manipulator, a designation that would trigger formal consultations between Washington and Beijing.
But it said that China must take additional steps on revaluing its yuan currency to avoid the label in the future.
Fratto refused to divulge what Wednesday's report would say, but repeated the conciliatory tone towards China used of late by top officials including Treasury Secretary John Snow.
"We've said for a while that they are in fact moving towards greater flexibility, and that they could and should do more," he told reporters.
Several bills have been introduced in Congress that would punish China with US trade reprisals for its perceived failure to move faster on currency reform.
The complaint runs that by intervening to keep the yuan cheap against the dollar, China is unfairly fostering a boom in its exports at the expense of US industry, and contributing to a record-breaking US trade deficit.
China tinkered with its currency trading regime last July, but since then the yuan has risen only marginally against the dollar, and all the signs point to Beijing sticking to its gradualist pace of change.
Chinese President Hu Jintao (胡錦濤), visiting Washington last month, pledged to continue exchange-rate reforms and boost US imports but offered no new concrete measures.
"We think the commitment [to reform] is real. We're going to focus on action," Fratto said.
"We have stressed the virtues of flexibility in the economy, and we're seeing China moving in that direction on the currency, capital account, on banking systems, using market instruments," he said.
Late last month, China raised interest rates for the first time since October 2004 in an attempt to cool its fast-growing economy.
Fratto said the impact on the economy and exchange rates would be limited.
"But it's interesting as a political signal," he said.
"We see it as a very positive development in sending a signal to financial markets, to their banks, that they are pointing towards greater reliance on market mechanisms," he said.
To list China as a currency manipulator, the Treasury must conclude that it is distorting the yuan-dollar exchange rate "for purposes of preventing effective balance-of-payments adjustments or gaining unfair competitive advantage in international trade."
If currency manipulation is established, the 1988 Omnibus Trade and Competitiveness Act would require the Treasury secretary to initiate negotiations with China.
The negotiations could be conducted via the IMF or bilaterally. The aim would be to ensure that countries concerned "regularly and promptly adjust" the exchange rate "to eliminate the unfair advantage."
That section of the US trade act does not spell out the consequences if the negotiations should fail. But other parts of the act put an array of measures including trade sanctions at the government's disposal.
Foreign Exchange Analytics analyst David Gilmore said the Treasury report had become more about politics than about economics, as the government tries to find ways of balancing congressional anger with not alienating China.
"The Treasury may well gamble that Congress will be sated by calling the yuan a `misaligned' currency if not naming China a manipulator," he said.
ROLLER-COASTER RIDE: More than five earthquakes ranging from magnitude 4.4 to 5.5 on the Richter scale shook eastern Taiwan in rapid succession yesterday afternoon Back-to-back weather fronts are forecast to hit Taiwan this week, resulting in rain across the nation in the coming days, the Central Weather Administration said yesterday, as it also warned residents in mountainous regions to be wary of landslides and rockfalls. As the first front approached, sporadic rainfall began in central and northern parts of Taiwan yesterday, the agency said, adding that rain is forecast to intensify in those regions today, while brief showers would also affect other parts of the nation. A second weather system is forecast to arrive on Thursday, bringing additional rain to the whole nation until Sunday, it
CONDITIONAL: The PRC imposes secret requirements that the funding it provides cannot be spent in states with diplomatic relations with Taiwan, Emma Reilly said China has been bribing UN officials to obtain “special benefits” and to block funding from countries that have diplomatic ties with Taiwan, a former UN employee told the British House of Commons on Tuesday. At a House of Commons Foreign Affairs Committee hearing into “international relations within the multilateral system,” former Office of the UN High Commissioner for Human Rights (OHCHR) employee Emma Reilly said in a written statement that “Beijing paid bribes to the two successive Presidents of the [UN] General Assembly” during the two-year negotiation of the Sustainable Development Goals. Another way China exercises influence within the UN Secretariat is
LANDSLIDES POSSIBLE: The agency advised the public to avoid visiting mountainous regions due to more expected aftershocks and rainfall from a series of weather fronts A series of earthquakes over the past few days were likely aftershocks of the April 3 earthquake in Hualien County, with further aftershocks to be expected for up to a year, the Central Weather Administration (CWA) said yesterday. Based on the nation’s experience after the quake on Sept. 21, 1999, more aftershocks are possible over the next six months to a year, the agency said. A total of 103 earthquakes of magnitude 4 on the local magnitude scale or higher hit Hualien County from 5:08pm on Monday to 10:27am yesterday, with 27 of them exceeding magnitude 5. They included two, of magnitude
Taiwan’s first drag queen to compete on the internationally acclaimed RuPaul’s Drag Race, Nymphia Wind (妮妃雅), was on Friday crowned the “Next Drag Superstar.” Dressed in a sparkling banana dress, Nymphia Wind swept onto the stage for the final, and stole the show. “Taiwan this is for you,” she said right after show host RuPaul announced her as the winner. “To those who feel like they don’t belong, just remember to live fearlessly and to live their truth,” she said on stage. One of the frontrunners for the past 15 episodes, the 28-year-old breezed through to the final after weeks of showcasing her unique