The US Treasury again shied away from labeling China a currency manipulator on Tuesday, but rapped the country for not moving quickly enough on exchange rate reforms.
In view of the appreciating renminbi or yuan - 7.5% to the dollar since 2010, the "Treasury has concluded that the standards identified in Section 3004 of the Act during the period covered in this report have not been met with respect to China," the report said.
Section 3004 lists standards for declaring a country with whom the US has significant trading ties "currency manipulator" and enter negotiations, as it did with China before 1994.
Beijing has been slow and reluctant to let the renminbi float freely fearing it would appreciate sharply, wrecking exports, which is at heart of the Chinese miracle.
It runs a trade surplus of $245 billion against the US.
The Treasury believes that the because of the "persistent misalignment of the renminbi at a substantially undervalued level", the currency has not moved sufficiently and "more progress is needed," the report said.
The report is a review of the currencies of the the US' 10 top trading partners - China, Japan, South Korea, Taiwan, Euro area, Switzerland, UK, Brazil, Canada and Mexico. India comes in at number 12 as the US' largest trading partners.
Japan also came for some harsh assessment over its government intervening twice in 2011 to keep the yen from appreciating against the dollar, because of the repatriation inflows after tsunami and safe-haven investors.