China is not manipulating its currency, although the yuan remains "significantly undervalued," the Obama administration said on Friday.
As of April, the renminbi (RMB) has appreciated 10 percent against the U.S. dollar in nominal terms and 16.2 percent in real terms since June, 2010, according to the Treasury Department's semi-annual currency report to Congress.
"China has taken a series of steps to liberalize controls on capital movements, as part of a broader plan to move to a more flexible exchange rate regime," the Treasury report says.
"In light of these developments, Treasury has concluded that the standard of manipulating the rate of exchange between their currency and the United States dollar for purposes of preventing effective balance of payments adjustments or gaining unfair competitive advantage in international trade during the period covered in this report has not been met with respect to China."
Still, the report says, "the available evidence suggests" that the yuan "remains significantly undervalued" and "further appreciation is warranted."
Treasury Secretary Jack Lew went to China in his first trip abroad in March, shortly after being confirmed to the new post.
He met with China’s new president, Xi Jinping, and discussed allowing their currency to rise against the dollar.
Congressional lawmakers and some business groups have pressed the White House to label China a currency manipulator, which they say is an effort to gain global trade advantages. They have gone as far as to pass legislation in the Senate that would impose penalties for undervaluing the yuan.
House Ways and Means Committee ranking member Sander Levin (D-Mich.) said the report "once again acknowledges the seriousness of the problem."
"Action is long overdue. Currency manipulation needs to be addressed in ongoing trade negotiations, especially the Trans-Pacific Partnership talks," he said.
"It is also time for the House Republican leadership to get out of the way and allow our currency bill to come to the floor for a vote."
The Treasury report also noted that it was closely monitoring policies in Japan meant to support the growth of domestic demand.
There has been growing concern about the yen's value dropping steeply through the fall. Manufacturers especially raised the issue earlier this year, although the currency's value began to level out again after elections there in December.
Updated at 7:40 p.m.