Advocates for revaluation of China's exchange rate have argued that an appreciation would boost demand for U.S. goods and shrink the U.S. trade deficit, but Chinese currency revaluation cannot provide a quick fix to the U.S. economic predicament.

The United States needed to address its persistent current account deficits and excessive consumption; China needed to address its ballooning foreign exchange reserves and excessive dependence on exports.

The imbalance in global trade, as China has a surplus and the United States has a deficit, may matter little economically, but the political situation may be more dire, as the world seems to be marching towards a trade war.

Global payment imbalances between the United States and the Asian economies are now at their widest level in the past sixty years.

If the world is to sustain open trade, China will have to change its ways.

The Bush administration should stop tiptoeing around the Chinese exchange rate issue and start putting real pressure on China to move toward a more flexible exchange rate system.

Sadly for the global economy, Chinese authorities will not change what they regard to be a highly successful exchange rate peg in the near future

Among the more disappointing aspects of US international economic policy over the past few years is how little progress has been made in putting Sino-US trade relations on a sounder footing.