The U.S. Treasury Department declined on Thursday to label China a currency manipulator but repeated that it considers China’s yuan undervalued and will keep trying to persuade Beijing to let it rise.

In a semiannual report to Congress on currency practices of key trade partners, Treasury said global financial conditions “have improved dramatically and signs of an economic recovery have begun to emerge.” It said none of its trade partners were manipulating their currency rates for trade advantage. (Reuters)

At the same time, the report criticized the current level of the RMB, noting that it is undervalued. The Obama Administration is always quick to point out that they are actively engaged in discussions with Beijing on this issue.

Basically the administration is playing the same game that Bush played: tell the home crowd that they are working on the problem, but do not let the issue of the RMB’s value rise to the level of a formal action, which could negatively impact the US-China relationship.

Good outcome here, I guess.