"On September 30, we received another petition under Section 301 of the Trade Act of 1974 on the issue of China's currency.

"The petition was similar to the petition filed on September 9 by labor unions and others.

"As we have previously made clear, the Administration believes China must move faster to adopt a flexible, market-based exchange rate and we have acted aggressively to persuade the Chinese government to undertake the complex transition toward that goal. Working closely with U.S. Treasury officials, China, according to Governor Zhou of China's People Bank, has made this a top priority and has made a series of policy moves to liberalize rules governing foreign exchange transactions, moved to strengthen and develop the finance sector, adjusted interest rates, and taken other steps toward increasing flexibility in financial policymaking; these are clear signs that the Administration's efforts are paying dividends.

"A Section 301 action would not assist in these efforts, and indeed could be more damaging than helpful at this time. We therefore must decline to accept the course of action recommended through this latest petition.

"Under the leadership of Secretary Snow and the Treasury, we will continue to work with Members of Congress on this issue as we seek to achieve our common goal: a more flexible, market-based exchange rate for China's currency and a level playing field for American businesses, workers, farmers and service providers."