Treasury passed China as currency manipulator but said yuan is substantially undervalued

In the previous biannual treasury reports on currencies, the U.S. Treasury refrained from labeling China a currency manipulator but took a tougher line than in past years, saying the yuan is "substantially undervalued" warning "progress thus far is insufficient and that more rapid progress is needed".

Members of Congress and others have urged the Obama administration to brand China a "currency manipulator," which, under U.S. law, would trigger negotiations and possible sanctions. But like his predecessors, Treasury Secretary Timothy F. Geithner has tried to resolve the issue through diplomatic channels - criticizing Chinese policy and urging them to make changes without formally invoking U.S. law.

Treasury gives China a pass on currency manipulation [via]