WASHINGTON, Oct. 15 (Xinhua) -- The U.S. government said on Thursday that China did not manipulate its currency against the U.S. dollar and has made significant contribution to the world economic recovery during the first half of 2009.
"No major trading partner of the United States" met the standards identified by a U.S. act of manipulating their rates of exchange against the U.S. dollar to gain unfair competitive advantage in international trade, the Treasury Department said in its Semi-Annual Report to Congress on International Economic and Exchange Rate Policies.
Photo taken on Oct. 15, 2009 shows the Department of Treasury of the United States in Washington Oct. 15, 2009. In its Semi-Annual Report to Congress on International Economic and Exchange Rate Policies, the Department of Treasury said on Thursday that no major trading partner of the United States met the standards identified by a U.S. act of manipulating their rates of exchange against the U.S. dollar to gain unfair competitive advantage in international trade. (Xinhua/Zhang Yan) Photo Gallery>>>
Based on a 1988 law, the Treasury is required to submit to Congress twice a year a report identifying whether its major trade partners manipulate their currencies to boost their exports to the United States or make U.S. products more expensive in overseas markets.
"Since the end of the dollar peg in July 2005, the renminbi has appreciated a cumulative 21.2 percent against the dollar and 15.7 percent on a real effective basis, based on the BIS (Bank for International Settlements) measure, said the report.
According to the BIS index, China's real effective exchange rate appreciated 13.3 percent between June 2008 and February 2009, it said.
The report also said China has made notable contributions to the world economic recovery.
China's "timely and aggressive fiscal and monetary policy stimulus has resulted in a strong domestic economic recovery and a decline in its current account surplus, and as a result contributed significantly to the recovery in global demand," it said.
China's real GDP rose by 7.1 percent on a year-over-year basis in the first half of 2009, as fixed investment and consumption contributed 6.2 percentage points and 3.8 percentage points to growth, respectively, said the report.
Reflecting the decline in China's trade surplus, net exports in the first half of 2009 subtracted 2.9 percentage points from growth, the report added.
In October, the International Monetary Fund (IMF) forecasted that China's real GDP would increase by 8.5 percent in 2009, up from its April forecast of 6.5 percent growth. The IMF predicted that in 2010 China's economy will grow 9.0 percent and account for28 percent of the anticipated 3.1 percent global growth.
China has managed an economic growth amid dwindling export. The report said China's exports fell by 31 percent between the third quarter of 2008 and the first quarter of 2009, while imports fell 30 percent.
The report observed that in the second quarter of 2009, the country's imports recovered strongly over its stimulus measures. However, exports increased only slightly.
"As a result, China's trade surplus narrowed to a three-year low of 35 billion dollars (3.2 percent of the GDP) in the second quarter. China's current account surplus narrowed to 6.7 percent of the GDP in the first half of 2009, from an 11 percent high in 2007."
Notably, China's trade surplus with the United States in the first half of 2009 fell 13 percent from the same period of 2008, said the report.
As one of the most important countries in the world, China provides a key force in the worldwide coordinated actions against the worst recession since the Great Depression of the 1930s, it said.
"China's overall policies played an important role in anchoring the global economy in 2009 and promoting a reduction in its current account surplus," it added.
It said that the U.S. government will continue to work with China both in the Group of 20 (G20) and their bilateral Strategic and Economic Dialogue to pursue policies that permit greater flexibility of the exchange rate and lead to more sustainable and balanced trade and growth.