On May 17, a bipartisan group of 42 US Representatives filed a petition under Section 301 of the Trade Act of 1974 alleging that China is manipulating its currency. The US Trade Representative has 45 days to decide whether to issue a formal investigation.
This is not the first time that a Section 301 petition regarding China's alleged currency manipulation has been filed with the Bush administration -- In September 2004 and in April 2005, members of Congress filed similar petitions, but on neither occasion did the administration take action by initiating a formal investigation.
In a move that may be related to the filing, on May 18 the Chinese government announced that it will widen the range that the Renminbi (RMB) can fluctuate against the dollar from 0.3 percent to 0.5 percent above or below the previous day's closing value.
These developments come prior to a meeting of the Sino-US Strategic Economic Dialogue to take place in Washington this week, which will include high ranking officials of both governments.