One of economic issues in Sino-US relations has been US charges of the alleged China’s manipulation of its exchange rate. According to the 1988 Trade Act，the US government assesses annually whether US trading partners manipulate their exchange rates in order to gain unfair competitve advantage in their trade with the US. Since 1992，the US Treasury Department concluded，and reiterated in the following years，that China was manipulating its exchange rate and currency reserves and thus impeded US exports to China.

Paradoxically，at the height of the Asian financial crisis in the second half of 1997 through now，the US has applauded this“manipulator.” President Clinton，Tresury Secretary Robort Rubin，Federal Reserve Chairman Alan Greenspan，and Secretary of State Madeleine Albright lavishly have praised China for holding its exchange rate constant in the face of massive devaluation in other Asian countries.

What is more，the US has insisted on its long-standing demand for a rapid opening of China’s financial market，and set it as a condition for China’s entry into the WTO，although everybody knows that liberalization of financial systems would certainly lead to a real devaluation of China’s currency.

How to interpret this US inconsistent，conflicting attitudes toward China’s exchange rate policy？Apparently，the former groundless charges of China’s manipulation of currency were used to press China to reducd its rade surplus with the US. The current US urge to hold Chinese currency stability may derive from an acute sense of selfinterest too. According to some estimates，a devaluation of renminbi by five percent would add US$4.3 billion in its trade deficit with China1198297.

Another reason seems to be the lack of umderstanding of Chinese currency’s valuation，regime and movement. This paper will try to discuss how the renminbi’s exchange rate was determined；the reforms of exchange rate regime；why renminbi did not devalue in the course of the Asian crisis；and the future exchange rate arrangement.