News flash. China is not a currency manipulator. Source: the same guy who said China was a currency manipulator just two months ago.
This is another sign of the emerging China policy of the Obama administration: Go soft on Beijing. We need these guys. And it's not just the administration. Remember the Schumer-Graham bill that threatened a 27.5 percent tariff on Chinese goods if China didn't revalue the currency and fast? It's nowhere to be found.
In the Treasury Department's semi-annual Report to Congress on International Economic and Exchange Rate Policies, China's currency was deemed "overvalued." But Treasury Secretary Tim Geithner, in a press release today, said the Chinese weren't manipulating it. Operative quote: "In the current Report, Treasury did not find that any major trading partner had manipulated its exchange rate..."
Geithner went on to credit China with taking steps "to enhance exchange rate flexibility." That's something he neglected to do during his confirmation hearing in January when he accused China of currency manipulation. Geithner's main points today: The Chinese currency appreciated by 16.6 percent in real terms between the end of June 2008 and the end of February 2009. And China's massive stimulus package -- which the U.S. hopes (a bit desperately perhaps) will help right the global economy.