READING UNITED STATES Federal Reserve chairman Alan Greenspan's strong comments about China's currency peg, I was reminded of my visit home to America in April. I arrived late at night to our house in a small town 160km from New York, two children in tow. The next morning, we bought a newspaper at the local store and spent a leisurely day catching up on the shopping malls for which Long Island is so famous. That afternoon, we received a phone call from a neighbour. Welcome home, she told my wife, would you be so kind as to remain inside your house for 10 days. It was an unofficial quarantine due to Sars. As we had breezed through customs in New York City, this came as a bit of a shock. We stayed home. At the time, the quarantine was perhaps understandable. The New York Times, read religiously by most people in town, was then running front-page stories on the Sars situation, at one point twinning a Hong Kong news story with an in-depth examination of China's woefully inadequate healthcare system. Nobody in any spot in the globe had any idea when Sars would peak or how far it would spread. Even worse, our next move was to be from Hong Kong to Beijing, where the knowledge gap was greater. The first quarantine was followed by a second after I returned to the US again last month. This time, I wandered up and down the east coast for a week until I felt I could visit my house. Both experiences left a bad taste in my mouth. The second, in particular - weeks after Hong Kong was given the green light by the World Health Organisation - reminded me just how little many Americans know about Asia. And this is where Mr Greenspan comes in. China is looming larger in the American consciousness. After 40 years of hibernation, the country has emerged from its shell. Its economy is now a source of growth for most of the world - and also a potential threat. But knowledge of China is woefully inadequate. Our American bank manager continues to ask us if Hong Kong is in Japan. Mention Beijing, and Americans' eyes widen as if you are talking about a trek through viper infested jungles. Ignorance is not helpful in matters of health or international trade. It can be used as a straw man for other ends. A number of recent incidents suggest a resurgence of American protectionism against China. US Treasury Secretary John Snow made comments last month promoting a flexible exchange rate for the yuan. He suggested the government's encouragement could be pretty strong willed. In addition, next Thursday a group of textile executives is holding a press conference on the steps of the Capital building to announce a petition they are filing against textile imports from the mainland. The most influential person in this debate is no doubt Mr Greenspan. Although in his testimony to Congress he was focusing on technical policy questions, his words about China's peg gave cover to those in America who would expand the argument to blame China (and its exchange rate policy in particular) for America's economic slowdown. This is particularly worrisome as we are approaching the election cycle in the US when protectionism becomes one of the songs du jour. Vitriol and rhetoric aside, it must be acknowledged that China has a problem on its hands. The country is attempting to keep monetary growth under control, retain rigid constraints on capital flows, encourage foreign direct investment and maintain the peg against the dollar. Something has to give. The mainland has a number of tools at its disposal, including 'sterilising' excess foreign exchange by withdrawing currency from circulation, promoting liquidity draining exercises such as the qualified domestic institutional investor (QDII) programme, altering tax policies to slow the inflow of foreign capital and ending capital controls in general. However, it is generally agreed that exchange rate policy is the quickest and most effective instrument at hand. This is where forces in America are attacking. How the country resolves these knotty fiscal and monetary questions will certainly have an impact on America. But economists in Asia say China's exchange rate policy cuts it both ways for the US - Chinese imports may be too cheap but American companies manufacturing in China are reaping vast benefits, too. Silent are those companies who are doing well under China's current exchange rate regime. A groundswell of popular protest against China's evil exchange rate does nothing to forward the debate.