Given the flurry of high-level exchanges between Beijing and Washington in the past few days and those set to happen in the next few weeks, the consensus is that China is set to resume the gradual appreciation of the yuan by widening the trading band. The only difference is over the timing and the scale of the revaluation.
US Treasury Secretary Timothy Geithner's surprise meeting on Friday with Vice-Premier Wang Qishan has added more optimism about a shift in the mainland's currency regime.
Some have suggested that such a shift could be a matter of days away as President Hu Jintao is heading to a nuclear summit in Washington today and is scheduled to hold a summit meeting with his US counterpart, Barack Obama. The mainland leadership is known for making a goodwill gesture ahead of an important summit with an American president. Others have speculated that the shift could come later, in the run-up or soon after the second US-China Strategic and Economic Dialogue, to be held in Beijing in late May.
The resumption of the yuan's appreciation will no doubt help ease the bilateral tension over the currency in the near future, but it would do little to help save American jobs and cut the huge trade deficit the US runs with foreign countries - the two major reasons cited by American politicians to force a change in Beijing's currency policy in the first place.
Indeed, many economists have agreed that America's core problem is its low saving rate, not China, and US consumers benefit more from low-cost goods made in China.
If the mainland revalues, the labour-intensive and low-margin industries mostly owned by foreign businesses are likely to move out of China and into other countries such as Vietnam. This means the US trade deficit will remain big, and American jobs will still be lost.