China manages the Yuan to its self interest and its interest is making sure it remains the world's low cost producer -- regardless of the global imbalances created. In the past decade China kept the Yuan fixed to the dollar despite a growing trade surplus (how do you think they ended up with all those dollar assets). China finally agreed to open its currency to a managed float in mid-2005. Why then? It appears that oil above $55 per barrel did the trick. And when oil prices began rising at an accelerating pace in 2007 the Yuan's revaluation to the dollar did the same. What then going forward? Hard to say what price oil must rally through to get the Yuan again appreciating against the dollar, but current trading levels aren't it. My guess is $80 oil will do it.