[buglemanster]

The Yuan is not free traded. The exchange rate is very carefully controlled by the government of China.

You forgot one point. The Yuan is pegged to the dollar (although less so now than a year ago). In a sense, the Yuan IS the dollar. When the dollar appreciates, so does the Yuan (in exact amounts), and likewise when the dollar depreciates. It is the equivalent of having a single currency in a free trade area, like the Euro in Western Europe and the American dollar in the United States. Do you honestly think the purchasing power of the USD is the same throughout the 50 American states? No way. This whole Yuan revaluation talk is a smokescreen, it has little economic merit. The Chinese aren't slave labors, they are free labors (albeit very cheap), and they are better off with their present wages than toiling in the farms.

[Myrddin]

Do you honestly think the purchasing power of the USD is the same throughout the 50 American states? No way.

Good point. My cost of living in Pocatello, Idaho is significantly less than it was in San Diego, CA. The single area that is not as price competitive is small computer parts. There is a cut throat competition among 50 computer shops in San Diego that keeps parts prices at rock bottom.