Beijing's deliberations about a revaluation of the yuan are becoming more political and less economic by the day. Despite sound economic reasons for a revaluation, the political element is the most important. Washington has made China the main scapegoat for its ballooning trade deficit and potential job losses because of surging imports of cheap mainland textile products. Washington's increasingly tough stance on the yuan has come as leading US economists including Paul Krugman and Federal Reserve chief Alan Greenspan have convincingly argued that a stronger yuan would only mean higher prices for Americans and no change in the huge trade deficit. The way this mounting political pressure from Washington is tackled will provide an interesting insight into the leadership qualities of top mainland officials as they balance domestic concerns with international politics. The signs are that mainland leaders are buckling under the pressure and are ready to revalue in the coming months. But they may have lost a good opportunity to do so - which was probably soon after first-quarter data showed the economy grew at a robust 9.5 per cent. Whatever qualities the new generation of leaders has been praised for, being decisive is not one of them. With a US Treasury report now calling for Beijing to revalue within the next six months and decisions by the US and Europe to reimpose quotas to cap the increase in imports of Chinese textiles, Beijing will be seen to have responded to the international pressure whenever it revalues the yuan. Caving in to US pressure will not look good for the leadership at home, with President Hu Jintao and Premier Wen Jiabao still consolidating their grip on power. This explains why Mr Wen said last week that the decision to revalue the yuan was China's sovereign right and that Beijing would not revalue when pressure was strong. Mr Wen's remarks came after he said in March that if Beijing did revalue the yuan, it would happen 'unexpectedly'. The premier was clearly trying to warn off international currency speculators who have been behind an influx of hot money into the mainland's property market and other assets betting on a yuan appreciation. By saying so, however, Mr Wen may have narrowed China's options in terms of timing. The speculators are most likely to heed the premier's warning and return again and again whenever the pressure shows any signs of abating - meaning there will be no let-up. Mr Wen could learn from Mr Greenspan, who is famed for his ability to leave every option open when talking about sensitive market issues. Although mainland officials cried foul over the US and EU decisions to impose textile quotas, Washington and Brussels were acting according to safeguard clauses included in the World Trade Organisation accession arrangements that Beijing agreed to. That explains why Beijing is stepping up efforts to negotiate with foreign trade partners over recognition of its market-economy status, which would make it harder for other countries to impose quotas on imports from the mainland. As it would be making a significant concession with a yuan revaluation, Beijing should force a concession from the US and EU regarding the recognition of its market-economy status.