The US Treasury said China’s prospects for “sustainable growth” were low as it criticised its economic policies and the activities of its state-owned banks, but declined to label it a currency manipulator.
As it released its semi-annual report on the foreign exchange practices of major trading partners, the Biden administration said China’s response to Covid-19 “targeted the early resumption of manufacturing rather than supporting household consumption” and the absence of demand-based stimulus would hamper the country’s growth.
In addition, the Treasury attacked Beijing for a lack of transparency around its currency interventions.
“China’s failure to publish foreign exchange intervention and broader lack of transparency around key features of its exchange rate mechanism make it an outlier among major economies, and the activities of state-owned banks in particular warrant Treasury’s close monitoring,” it added.
Whereas the US Treasury temporarily labelled China a currency manipulator during the Trump administration, at the height of trade tensions between Washington and Beijing, the Biden administration has not gone that far.
The Biden administration’s latest report continued to single out Taiwan and Vietnam as countries that were top of the list of concerns in terms of their currency practices. The Treasury said it was engaged in consultations with them and had been “satisfied” with Vietnam’s progress since an agreement between the two countries was reached in July.
In addition to China, Taiwan and Vietnam, the Treasury said it was monitoring the currency practices Japan, Korea, Germany, Ireland, Italy, India, Malaysia, Singapore, Thailand, Mexico and Switzerland.
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