On Chinese currency

Actually, this is one of the most forgotten dimensions of China's success. By keeping its currency artificially underpriced, China is bolstering its sales volumes, as they then possess a strong competitive advantage in the World market - a very low price. But this comes with a clear cost - salaries! When keeping the currency undervalued, China is not allowing that increases in productivity have a direct influence on wages, thus keeping the average citizen underpaid vs what it should. In an economy that is only know kick-starting, very controlled, with severe restrictions on information circulation and travelling, this is a problem that can be managed... at least for a short while. But soon, international currency market and internal productivity pressures will climb to a point where holding the nowadays Chinese currency value will cost too much to China. The correction will be strong, sharp and sudden.

http://edition.cnn.com/2010/WORLD/asiapcf/04/04/us.china.treasury/index.html