RMB appreciation - will it make a difference?

Everyone wants the RMB to appreciate. The US. The EU. All of the Asian countries who are competing for exports. Yet, the impact of a change will have limited impact on the trade balance. It has been estimated that a 10% appreciation will led to a little over a 10% cut in the trade balance which would take it from a $400 billion t a $355 billion surplus. This is not what most countries would like to see. In fact, when the RMB did have an appreciation of 20%, there was no effect on the trade balance. The trade surplus just grew. Additionally, because the RMB has been tied to the dollar, the other Asian countries have actually seen an improvement in their currency position when the dollar gained ground last year.

The imbalance problem will not be solved by a change in currency prices. there has to be a more fundamental change in consumption behavior across Chimerica.