Globalization and free trade are dead.Nations will look after their own interests first which they are required to do in order to survive.

Protectionism,always in the backgound,will increase - get used to it.

I agree Globalisation is finished in the longer term.
Increasing bunker fuel costs are nibbling away at the wage advantage
of China. Steel and furniture manufacture has moved back to the US and
China is aware of what is happening and for that reason alone does not
want to revalue its currency.

Politicians generally do not want to acknowledge peak oil as a matter
of principle, but they are now being forced to face it as an historical fact.
The price of oil will be more effective than tariffs.

This essay on the revaluation of the CYN ( yuan ) is yet another red herring, by yet another Academic apparatchik.
It's almost as if Garten was a paid neo-liberal informant for the Pentagon. Apart from his jaundice views, and myopic hyperbole on Sino-American Relationships, he delivers a didactic, atypical almost prophetic message.

The Author, like most Western intellectuals have scant appreciation of China's leadership power-brokers i.e Hu Jaibao, Wu Bangguo and Xi Jinping. All members of the elite CCP Politburo, wielding prodigious muscle over 1,336,890,000 subservient citizens; 1/3 older then 60 yrs, as compared to 26% in the USA.

China has undergone one of the fastest and most far reaching metamorphosis in human history !

The debate over China's valuation of the RMB has been raging ever since Obama took Office. That Wall St, is the apex of the World's Futures & Hedging market, it becomes all too obvious where the crux lies. The hawks/scammers, have been hedging on the yuan to rise/fall, to make a substantial killing.

Amidst the chorus of protest, led by enigmatic Secretary of State Hilary Clinton, 15 US Senators are now pugnaciously claiming the yuan is artificially ( 40 % ) undervalued. Effectively, subsidizing China's massive exports; gaining substantial unfair advantage, and exacerbating the 17 %( declassified ) unemployment rate etc. Gaffe or peccadillo ?

With the US trade deficit approaching 25% or 6% of GDP, it isn't surprising the US is looking for a scapegoat for their gross profligacy and entrepreneurship. After all, the US brought down the GFC pack of cards, and rallied the domino fallout !

According to Xinhua - People's Daily, China has for the past 21 months spent several trillion RMB shoring up the CNY, preventing currency speculation and fluctuations. By keeping the yuan undervalued, it has drastically deterred Japan. Korea and India from revaluing their own currency against the US $. In effect, reducing their competitive edge against China's exports.

Historically, China has pegged the RMB to the US$ since early 2005 at 6.107 yuan. It has tried to maintain a 3% parity, despite the GFC, stimulus
cont..

of US $ 584 B, myraid social upheavals ( displacement of 12 million migrant labor )etc. It has appreciated 17.2 %. ( Forex trade Apr.2010 exchange rate 7.340 yuan )

Ever since the halcyon 1970 when Britain suffered a run on the pound ( Nil Reserves ) Sovereign States have started acquiring Reserves i.e US $, to shore up their own currency: safeguarding their Financial assets, Banks, bullion, Treasury Bonds etc and keeping inflation in check. RBA please note.
China holds $ 1.2 T of US Reserves - in Bonds and securities. It has purchased US debt - housing defaults, toxic assets, insolvent Banks, trade deficit, Obama"s stimulus etc. Effectively, it has kept interest rates almost zero, making it easier to borrow, credit, and to keep the Economy moving. In essence it holds the lynch pin to America's fortunes. At a rate of $ 18.3 B a month, China predicts it will double in five years. Presently, it is diversifying it's holdings, not purchasing Govt backed T Bonds, and instead buying the Euro.

The A House is wanting. The cupboard is bare, nil savings, providing cheap ( printing press credit ) funding for it's deficits, allowing the Economy to grow as consumers continue to buy cheap Chinese goods. Productivity overall has declined, as US morphs into a service Industry.

Paradoxically, the US protest is almost plausible because it impinges on the future of the Western World's leadership. It's an unenviable position to be in, specially when like in the Shakespearean play, Shylock, holds the trumps, goodies and the cookie jar to boot. Crying foul, in light of a stacked hand is disingenuous, and will serve little purpose.

The last thing we need is another Cold War knell.