Won’t bow to pressure

Those who contend a revaluation is unlikely in the near term point out that China is benefiting from the peg. “They could always revalue their currency but what would be the point?” says Glassman. “By linking to the dollar they can offer a stable currency, which is attractive. They can open their economy and say Europeans and Americans are welcome to build factories here. Also, it enables them to become an export platform for the American market and sends them on the road to development.

“[Revaluation] won’t happen if everyone keeps asking them to do it. China will only do it if it fits into their long-term plan. It’s a very closed system — outsiders aren’t allowed in. It’s not our choice.”

Tom Rogers, senior currency analyst at Thomson Financial, points to the long history of the Chinese as successful traders, going back to the days of the Silk Road.

“There is not much reason for them to change,” he says. “I know what the stick is — the international community. But what’s the carrot for China to revalue their economy? The Chinese are very good traders. They aren’t going to do it without getting something in return. Unless they get some sort of G8 membership or military cooperation pact, it’s not going to happen.”