China, A Manipulator?

The U.S. Treasury Department released reports that accused China of allegedly manipulating the foreign exchange market. It, in fact, warned China to change their foreign exchange policies else they will be really tagged as a manipulator the next time the U.S. Treasury Department releases their report.

With a close watch on China’s foreign exchange policies, the U.S. Treasury Department reported to Congress that China was in malpractice by pegging its currency 40% lower than its actual value or about 8.28 Yuan to 1 Dollar. Lowering their currency rate unnaturally results to cheaper Chinese goods sold in the American market or in any foreign market accepting Chinese imports.
The U.S. Treasury Department said US producers were complaining about this unfair trade practice which, they claim, "have caused them tens of thousands of American jobs and shuttered plants in industries from textile to toy-making".

Besides this effect in the American economy alone, the U.S. Treasury Department also pinpointed the obvious effect of this "artificially-lowered currency rates" in China’s economy, global economic growth, and trading partners.

Source: Forex Violation: America Warns China, The Indian Express Newspaper Online and Forex – US Dollar Little Changed Vs Yen, Down Vs Euro In Late Asian Trading, Forbes.com