Revaluation would accelerate this trend.

Revaluation of the Chinese yuan would also help.

But would a revaluation of the renminbi solve America s problems?

But it seems that both revaluation and reform will take time.

An independent monetary policy requires a flexible exchange rate, not a revaluation.

The renminbi s unilateral revaluation will end, accompanied by the gradual easing of external liquidity pressure.

In Brussels the other day, Premier Wen Jiabao scolded European leaders for pressing for the renminbi s revaluation.

Yes, further revaluation of the exchange rate is needed, but this can play only a secondary role.

(Japan's Finance Minister had threatened to commit hara kiri if the revaluation rate was set at 17 .)

But costs are determined by the real revaluation, which is the sum of exchange rate changes and inflation.

Under these circumstances, revaluation of the exchange rate will not have a severe impact on an economy s development.

However, unlike Japan, China will not accede to calls for a sharp one off revaluation of the renminbi.

Moreover, capital inflows increased significantly, owing to real investment opportunities in the high growth economy and the expectation of renminbi revaluation.

Other countries, like Norway and Switzerland, are running current account surpluses that exceed 10 of their GDP, but are resisting currency revaluation.

When Congress pressed China for a large currency revaluation in 2004 2005, China s current account surplus was rising at an accelerating pace.

On the surface, at least, the mini revaluation hardly seems to have compromised China s ability to bend exchange markets to its will.

Chinese authorities certainly seem to have that interpretation of the roots of Japan s malaise in mind as they seek to avoid rapid revaluation.

The first round of Yuan revaluation won t be over until the currency is up against the dollar by at least 10 , and probably more.

Debates rage over the bilateral trade balance and revaluation of the renminbi, the status of Taiwan and Tibet, human rights violations, and intellectual property theft.

Debates rage over the bilateral trade balance and revaluation of the renminbi, the status of Taiwan and Tibet, human rights violations, and intellectual property theft.

But, even with China s efforts to loosen the renminbi dollar linkage, it is arguable whether revaluation could save American jobs or improve the US trade balance.

The revaluation effect would be reinforced by rising wage pressures inside China, which are already leading some labor intensive Chinese firms to invest abroad (there are more than 700 Chinese affiliates in Vietnam alone). Some of these firms have been weighing whether to move production abroad or to inland provinces of China revaluation could push them in the former direction.

But if China does not accelerate the renminbi s revaluation, the world might see a large burst of consumer inflation in China in the next two or three years.

Inti Raymi was then forgotten, until the mid 20th century when, as an expression of a great wave of revaluation of native culture in Peru, it was restored.

The 20 revaluation of the renminbi against the US dollar in 2005 2008 undoubtedly facilitated this in the case of recipient countries whose currencies did not also appreciate against the dollar.

China s rising trade surplus has led some observers to call for a revaluation of the renminbi to correct what they see as an unfair competitive advantage that China maintains in international markets.

Revaluation upward, the inevitable result of floating the renminbi, would increase the burden of renminbi denominated debt, making the balance sheet problems of Chinese banks and state owned enterprise harder to correct.

But the revaluation is likely to be a one time affair and the free floating of the renminbi is probably not real because a stable currency is very much in China s interest.

Pressure for revaluation stems, therefore, not from the real needs of China economy, but from large imbalances in the United States, particularly its long standing trade deficit, which exceeds 5 of GDP.

Trying to determine the right level of the renminbi, by contrast, is a fool s game, and the proposal of a step revaluation to get to that level has become a polemical distraction.

Trying to determine the right level of the renminbi, by contrast, is a fool s game, and the proposal of a step revaluation to get to that level has become a polemical distraction.

On the surface, at least, the mini revaluation hardly seems to have compromised China s ability to bend exchange markets to its will. Foreign experts had warned that a small Yuan appreciation might be worse than none.

Today, given the importance of exports to China s economy, its government is reluctant to permit a major revaluation, despite strong pressure by foreign governments to allow the renminbi to appreciate in line with the country s huge trade surplus.

Revaluation of its currency is necessary in part because the undervalued renminbi has become yet another a source of friction in Asia, as many in the region now believe the Chinese are using their currency as a policy weapon.

China, by contrast, sees its growth as tied to a stable currency, and may not want to introduce a more flexible exchange rate regime, even after the 2.1 revaluation in July, pending alleviation of structural problems for which it is extremely difficult to set a timetable.

Pressure for revaluation comes at a stage when per capita national income is merely 1,000, not 10,000 or 15,000, so China still needs a rather long period of rapid economic growth to reach anything like the stage that Japan had achieved when it allowed the yen to be revalued.

But if China does not accelerate the renminbi s revaluation, the world might see a large burst of consumer inflation in China in the next two or three years. If so, the consequences will be a choice between the destructive runaway inflation familiar from much of post WWII Latin America and stagflation.