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U.S. Treasury Urges China to Add Flexibility to Currency Value

In its semi-annual report to Congress, the Treasury Department urges China to overhaul its currency system. Critics accuse Beijing of keeping the value of the yuan artificially low to boost exports.

Below is the conclusion of the section of the U.S. Treasury's report on the Chinese currency.

Excerpt of Treasury Report on China

"The fixed exchange rate that China now maintains is a substantial distortion to world markets, blocking the price mechanism and impeding adjustment of international imbalances. It is also a source of large and increasing risk to the Chinese economy. China has completed significant preparations over the last two years for adoption of a more flexible, market-oriented exchange rate. China is now ready to move to a more flexible exchange rate and should move now."

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Adam Davidson is a contributor to Planet Money, a co-production of NPR and This American Life. He also writes the weekly "It's the Economy" column for the New York Times Magazine.