By the end of 2007, China’s current account surplus represented 11.1 percent of thecountry’s gross domestic product. Many have argued that an appreciation of the RMBwould help to reduce this surplus and restore order to global accounts. Using a panel dataset including China’s exports to 33...

Editor's Note: This is an edited transcription from the general session of the 73rd Annual Conference of the Western Economic Association International, held in Lake Tahoe, Nevada. Copyright 1999 Western Economic Association International.