Two months after China revalued the yuan, Beijing is coming under pressure to raise the value of the currency further and faster.
Last week in New York, US President George W. Bush called on President Hu Jintao to allow more yuan appreciation. Both the Organisation for Economic Co-operation and Development and the International Monetary Fund have called for greater exchange rate flexibility, with some IMF directors recommending 'that the authorities allow the exchange rate to move more quickly'.
Others have been less moderate in their language. America's National Association of Manufacturers accused China outright of currency manipulation, and Fred Bergsten, head of the Washington-based Institute for International Economics, warned of a US-China trade war 'unless China promptly revalues the renminbi by at least 10 to 15 per cent'.
From Mr Bush to Mr Bergsten, everyone is upset by how little the yuan has risen following its 2 per cent revaluation in July. Since then, the currency has barely inched higher. At the yuan's post-revaluation peak, reached in intraday trading last Friday, the US dollar was quoted at 8.087 yuan. That equates to a yuan appreciation of just 0.28 per cent in the two months following the initial move. It is small wonder that many observers in America believe revaluation was a con.
The issue will be on the table again this week, when Finance Minister Jin Renqing and People's Bank of China governor Zhou Xiaochuan meet US Treasury Secretary John Snow in Washington ahead of the IMF's autumn meeting. It is likely to be an awkward encounter.
Mr Snow is under intense domestic pressure to screw a second, bigger revaluation out of Beijing, or formally declare China guilty of currency manipulation next month and initiate punitive action. Despite the threat of blanket tariffs on Chinese exports to the US, there are excellent reasons to believe that Mr Jin and Mr Zhou will resist the pressure. One is that the central bank has repeatedly ruled out further revaluations, declaring its intention to keep the yuan 'basically stable' while developing the domestic foreign exchange market.
That is exactly what it is doing. The PBOC is trading in sufficient volume to allow just a tiny amount of fluctuation between the dollar and the yuan each day. At the same time, it is holding out the prospect of more permitted volatility in the future - as much as 0.3 per cent either side of the previous day's close under the new system - while pushing banks and companies to get more sophisticated about how they manage exchange rate risks.
A second reason the Chinese authorities will not allow a rapid appreciation of the yuan any time soon is that they are anxious to deter speculators. Because US dollar interest rates are higher than yuan rates, if a speculator borrows dollars internationally to buy yuan, which he then places on deposit in a mainland bank, he must pay a differential, or 'cost of carry', of 2 per cent a year.
At its current rate of appreciation, the yuan will rise just 1.68 per cent over the next year, which is slow enough to leave speculators out of pocket. But if the rate of appreciation were to rise above speculators' 2 per cent cost of carry, large volumes of hot money could begin flowing into China once again.
That is something the authorities, already struggling to contain an investment boom, are extremely anxious to avoid.