Blink is right
TWO friggin' percent--
The smallest guess I've seen was that the yuan was undervalued by 25%, not TWO percent.
Yeah, but it's the Chinese government who set the exchange rate. It starts off at 2%, but it'll change a lot more than that.
An old rule of thumb is that the "real" exchange rate is the average of whatever you can get from a money changer on the street, and it's usually a lot different from the government-set value. It's been years since I've seen that statistic for the yuan, so I can't say what a real value should be.