The Wall Street Journal grudgingly admitted in a Thursday story that China’s decision last month to devalue its currency is winning praise from foreign analysts, the IMF and even some US Treasury officials.

The Journal was referring to an IMF statement in mid-August that China’s new mechanism for determining the central parity of its currency “appears a welcome step” as it sets the stage for market forces to have a bigger role in determining the exchange rate. Some US Treasury honchos began praising China’s currency stance as far back as April and have since adopted a cautious and mild attitude toward the August devaluation, reflecting growing international support for the move.

“The currency maneuver has positioned the Chinese government to press for a greater international role for the yuan during visits to a series of Group of 20 meetings starting this week and visit to Washington (by Xi Jinping) later this month,” the Journal said, while bolstering China’s bid to get the yuan included in the IMF’s basket of reserve currencies.

The Wall Street ledger also quoted several experts as saying that China is helping the US by holding to its currency commitments, making its currency more market-related, lifting Chinese exports and limiting Chinese currency interventions to times “necessitated by disorderly market conditions.”

But here comes the party pooper. Saeth the Journal: “The praise comes in a difficult context, however. China’s slowdown and a host of other downside risks threaten to push the global economy into much deeper trouble without concerted action by the world’s largest economies.” The newspaper was quoting from a separate IMF appraisal issued on Wednesday.

Can’t get too generous with China. After all, this is the country that unnerved poor investors with fears about its slowing economy.

Jack Lew

US Treasury Secretary Jack Lew also appears to be back tracking a bit on his agency’s earlier restrained praise for the yuan move. He says the US will hold China responsible for the political and economic impact of its currency policies after last month’s yuan devaluation.

“They have to understand, and I make this point to them quite clearly, that there’s an economic and a political reality to things like exchange rates,” Lew said in a CNBC interview on Thursday.

“They need to understand that they signal their intentions by the actions they take and the way they announce them,” he said, alluding to the market shock that initially greeted the devaluation. The Chinese authorities “have to be very clear that they’re continuing to move in a positive direction. And we’re going to hold them accountable,” Lew went on to say.

Asia Unhedged thinks Lew is being unfair to China by covering his political behind. After all, Lew concedes that the Chinese are moving in a positive direction but then warns: “You better keep doing it!” You can’t really blame regulators in Beijing for getting ticked off at the US.

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