BUSINESS

U.S. delays China currency manipulator report

10/14/2011 04:07 pm ET | Updated Dec 14, 2011

WASHINGTON (Reuters) - The Treasury Department said on Friday it would delay until after key global economic meetings later this year a ruling due on Saturday on whether China was manipulating its currency to gain an unfair trade advantage.

The decision to delay the sixth semiannual report to Congress under the Obama administration came days after the Senate approved a bill that aims to pressure Beijing to let its yuan rise in value faster.

The delay "will give us a chance to assess progress following several international meetings," the Treasury Department said in a statement.

Ministers and leaders of the Group of Twenty major global economies and the Asia Pacific Economic Cooperation forum, bodies in which the United States and China are key players, are scheduled to meet this month and in November.

Many U.S. lawmakers and economists contend that China undervalues the yuan by as much as 15 percent to 40 percent to give its companies a price advantage in global markets. Beijing denies this contention, and has pressed the White House to block the currency bill, which it says breaks World Trade Organization rules.

The Obama administration says it shares the goal of the Senate legislation, which has been held up in the House of Representatives in the face of Republican opposition. But it has raised concern that some provisions could violate WTO rules.

The Democratic-controlled Senate on Tuesday voted 63-35 to pass the bill, which would allow the United States to slap duties on goods from countries with undervalued currencies.

But the measure has been held up in the Republican-controlled House, where Speaker John Boehner opposes the measure and has branded it "dangerous."

Boehner, the most powerful Republican in Congress, could make sure the bill never comes up for a vote. A similar measure cleared that chamber last year 348-79, when it was controlled by Democrats.

The Obama administration, in five previous reports, has declined to take the step of formally labeling China a manipulator. Doing so would require stepped-up negotiations with China over its exchange rate.

The previous Treasury report on May 27 found that China did not meet the U.S. legal definition of a currency manipulator, but said Beijing still needed to allow the yuan to rise much faster in value.

The semiannual report has often been delayed for weeks or months beyond its April 15 and October 15 deadlines.

(Reporting by Mark Felsenthal; Writing by Paul Eckert; Editing by Xavier Briand)

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