Treasury ties trade to Chinese currency

WASHINGTON, Oct. 16 (UPI) -- The U.S. Treasury said in a report handed to Congress the Chinese renminbi was undervalued and risked undermining progress made correcting trade imbalances.

In a semi-annual report, the Treasury said "the rigidity of the renminbi and the re-acceleration of reserve accumulation are serious concerns which should be corrected to help ensure a stronger, more balanced global economy consistent with the Group of 20 framework."

The Treasury stopped short of accusing China of manipulating its currency, which would presumably lead to international sanctions and increased tension, the Financial Times reported Friday.

In Washington, lawmakers are considering bills that would mandate trade sanctions against countries that manipulate their currency.

Treasury Secretary Timothy Geithner said earlier this year that China was manipulating its currency, but the accusation has not been repeated in any official reports, the Times said.