U.S. President Barack Obama's nominee for Treasury secretary may be signaling the new administration will take a firmer stand with China on currency issues.
Timothy Geithner's confirmation is expected by the full Senate as soon as Monday.
In a written statement, Geithner has told a committee that China is "manipulating" the value of its currency.
U.S. politicians, labor leaders, and manufacturers have long complained that China intervenes in foreign exchange markets to keep the value of its currency artificially low. That gives Chinese products a price advantage on world markets.
China has recently allowed the value of its currency to rise by about 20 percent, but some economists say it is still undervalued.
Under U.S. law, if the Treasury Department determines that China is a "currency manipulator," Washington is required to take actions that begin with dialogue but could escalate to trade tariffs.
The Bush administration did not officially call China a currency manipulator to avoid annoying an important trading partner, and because there is already a high-level economic dialogue underway.
Some information for this report was provided by AP and Reuters.