Revaluation of Chinese currency?

US is pressing for revaluation of Chinese currency not exactly knowing why they want it.

Explanation, that revaluation will reduce the trade deficit with China is not valid, as most likely the real effect will be the increase of the USA deficit. Reason for the increase of deficit is very simple – for Chinese companies US dollars earned by exporting will bring less in local currency, they will ask for the price increase, but all the raw materials produced locally will adjust to the new lower levels, therefore making exports to USA even more profitable.

Another silly explanation, that revaluation will increase sale of USA goods to China is not valid as well. The true consequence of revaluation will be that China will import even less goods from USA, and any other country, because they import only what they really need and what they can not produce in China. Why should Chinese consumers pay even more money then today, in local currency, if they can get the same or very similar goods from local suppliers at much better prices?

It looks like USA is pressing for revaluation with the only one idea in mind – once China revaluates its currency all prices and salaries in China will go up for at least that much, preferably even more, and that will make automatically Chinese goods not competitive in the world.

All the above is wishful and childish thinking which has nothing to do with the real world and especially with China. It is obvious that bureaucratic experts in USA still do not understand China, how it works and how it thinks. They are applying their way of thinking as a pattern which is valid for all. If someone thinks differently, they just keep repeating their own story, believing that one day it will persuade the other party to start thinking as they say.

Fortunately for China, they are following their own way of thinking and for now they are winning almost every time.