They are in for a big disappointment. Under huge political pressure, China may allow more flexibility in the exchange rate - as indicated by central bank announcements in June - but currency movements alone cannot correct the huge imbalances between China and the rest of the world, much less revive US manufacturing in industries in which it is no longer competitive.
By contrast, the scale of Chinese manufacturing, its first-class infrastructure and the productivity and cheapness of Chinese labour all give this export machine a huge advantage of much greater significance than the exchange rate. A higher-valued renminbi would not stop this juggernaut - rather, it would slow down inflation and force Chinese manufacturers to introduce new technology to become even more competitive.
