The Bush administration says China is not violating a U.S. law against currency manipulation, but it is urging Beijing to move to a more flexible currency exchange system.

The assessment was contained in a report issued by the U.S. Treasury Department Thursday.

U.S. manufacturers and some members of Congress have accused China of artificially manipulating its Yuan currency to keep its value low. They say China's policy of setting the value of its currency at 8.3 to the dollar gives Chinese goods an unfair advantage over American-made products and has resulted in the loss of millions of U.S. jobs.

Treasury Secretary John Snow, testifying to the Senate Banking Committee, echoed the report's finding that Beijing's policy is not appropriate for a major economy like China's and should be changed.

His comments are the latest in a series of U.S. public statements and top-level diplomatic meetings on the issue over the past several months.