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US avoids labeling China ‘manipulator;’ lawmakers seek action

WASHINGTON, June 13, 2007 (AFP) - The US Treasury stopped short of branding China a "currency manipulator" Wednesday even as new efforts were launched in Congress to punish Beijing for maintaining an undervalued yuan.
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The Treasury, in a much-anticipated semiannual report, said China's tightly controlled exchange rates have led to a variety of economic problems including a massive buildup in currency reserves that poses global risks.

The report said the policies have left the Chinese yuan undervalued but that US officials could not conclude that this was a result of a deliberate effort to gain an unfair trade advantage.

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The conclusions allowed China to avoid a process that could trigger sanctions under US law.


But hours after the report was issued, lawmakers critical of China's trade and foreign exchange policies unveiled legislation that could make it easier to impose sanctions on Beijing.

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Senators from both major parties introduced legislation requiring the Treasury to penalize countries with "misaligned" currencies, and expressed confidence the measure would gain enough votes to override an expected presidential veto.

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"This bill requires the Treasury Department to take firm but fair act

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