Bloomberg News
Revalued Yuan?
China abolished its dollar peg back in July of 2005, but has allowed only a modest appreciation of the yuan vs. the greenback and other foreign currencies. Trade critics abroad believe the yuan is massively undervalued given China's torrid growth and its explosive rise in exports. Yet Beijing is loath to change its policy given that exporters and farmers would be hurt by a stronger currency and unemployment would likely result. The government recently estimated that a 5% to 10% appreciation of the yuan from present levels would eliminate 3.5 million export jobs and hurt 10 million farmers.