Protectionists in Washington are preparing themselves for a nightmare of a number.
Through October, the US deficit with China was running at an annual rate of US$200 billion, far exceeding last year's record imbalance of US$162 billion.
The tidal wave of exports from China to North America is welcomed by consumers but the US government is less appreciative.
'We are disappointed there isn't more movement,' said US Treasury Secretary John Snow on December 8, referring to a minimal 0.4 per cent appreciation of the yuan against the US dollar since July 21 when Beijing revalued its unit. China's currency, US trade experts claim, is undervalued by up to 20 per cent.
Most experts don't expect that recent trade disputes between China and the US will go away, even though trade relations improved in November with an agreement that the flood of Chinese goods can be limited on mutually accepted terms.
'Now, US department stores know they can buy Chinese garments without having to fear a new trade war,' said US trade lawyer Matthew McConkey.
But the Chinese government has little room for manoeuvre. 'China cannot revalue the currency despite a big trade surplus,' said Andy Xie, head of the Asia-Pacific economics team at Morgan Stanley in Hong Kong, because the country faces massive overcapacity and an overextended property market.
