Chinese policymakers will turn a deaf ear to calls for a stronger yuan, happy that they can achieve both rising exports and a stable forex regime at the same time, analysts said.
The Chinese currency's peg to the US dollar has paid off handsomely over the past months as the greenback has fallen against both the euro and the Japanese yen.
Pleas from Tokyo -- and probably in the future from European capitals as well -- for a revalued yuan are most likely to be ignored by the leaders and technocrats in Beijing.
"They don't have to listen to others since their interest is in their own economy," said Robert Subbaraman, an economist with Lehman Brothers in Tokyo.
"The Chinese economy has a number of challenges ahead of it and the last thing China needs at this stage is losing its competitiveness," he said.
What is happening now is the reverse image of the Asian financial crisis, which began nearly six years ago.
Then, China received kudos throughout the region and beyond for keeping its currency stable against the US dollar in the face of competitive devaluations throughout the region.
Now China is increasingly being reproached for the exact same steadfastness as its exporters reap the windfall of a weakening currency.
Japanese politicians such as Finance Minister Masajuro Shiokawa and Economic and Financial Affairs Minister Heizo Takenaka have repeatedly called for a yuan appreciation.
"We have to consider a variety of things on the assumption the yuan's present level is diverging considerably from its purchasing power price," Takenaka said recently, referring to a standard measure of how currencies can be compared with each other.
He could soon be joined by prominent Europeans if China's export momentum is maintained on the back of a euro that has strengthened from 8.4 yuan late last year to 9.7 yuan now.
"The strong euro ... is magnifying global demand flowing to China," said Andy Xie, managing director at Morgan Stanley Dean Witter in Hong Kong.
"China's exports to Europe are rising twice as fast as previously expected," he said.
The value of Chinese exports to Europe soared 48.6 percent in the first four months of the year to US$16.3 billion, according to official Chinese statistics.
Against that backdrop, it would seem that China could afford to revalue its currency, given the strong performance of its exporters, not only in Europe but also the US.
US imports from China rose 31 percent in the first quarter and if the momentum continues the US may import more from China than from any other country in just another two years, according to Xie.
At the same time, there are several reasons why China would consider a revalued yuan an extremely bad idea.
Chinese exports may be less robust than would appear given the flood of China-made products onto European and American markets as its own economy sucks in increasing amounts of foreign goods.
In the first three months of the year, China imported US$1.03 billion worth more than it exported, resulting in its first quarterly deficit in seven years.
Just as important, China does not have to change its currency to please others.
It is now strong enough to hold its own, as long as the rest of the world's major economies are not joined against it.
"China will only feel pressure if the United States joins Japan and Europe in pushing for a change in its exchange policy," said Shi Jianhuai at Peking University's China Center for Economic Research.
Perhaps the most compelling reason for not revaluing is that China is not convinced that a stronger yuan will be in anyone's interest beyond the very short term.
"There's a lot of uncertainty in the world at the moment. The US dollar is falling but who knows how long time it will continue to fall," said Benny Chiu, research manager for Hongkong Bank China Services.
"In that kind of situation, the best thing to do is not to change,"he said.
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