The Bush administration, softening its tone of criticism toward China, reported to Congress on Tuesday that the Chinese had made strides in revaluing their currency, but that the progress was “considerably less than is needed.”
The muted tone, in contrast with a finding more than six months ago, came in a report that is required twice a year. It was issued four days after a trip to China by Treasury Secretary Henry M. Paulson Jr. and six other Cabinet-level officials. And it appeared to reflect Mr. Paulson’s preference for quiet persuasion over confrontation.
The administration has called on China to open its economy further, crack down on product piracy and let the value of its currency, the yuan, rise. Many economists contend that the Chinese have deliberately undervalued the yuan to promote exports. A low value for China’s currency makes its exports relatively cheap in the West and its imports more expensive. [Full Text]