From the New York Times (link):
The Bush administration declared today that China did not seem to be manipulating its currency exchange rates to promote exports or protect its vast dollar holdings resulting from years of trade surpluses.
The finding is likely to deepen the debate over how to deal with China’s emergence as a global economic power, and to prompt a strong response from manufacturers and other interest groups that have been pressing the administration to address what they see as China’s unfair trading practices.
In a semi-annual report on international economic and exchange rate policies, issued weeks after a strained summit between President Bush and President Hu Jintao, Treasury Secretary John W. Snow said China’s record remained “deeply concerning” but he gave China some credit for taking steps to try to improve its record on currency issues, as well as on encouraging imports of foreign goods and opening its economy to foreign investment.
Also see “China stands by currency reform plans” from the BusinessWeek (link)
And “Weak retail sales cap dollar’s rally” from the Financial Times (link)