The real economy, not the yuan, stupid

The year 2010 was bumpy for Sino-US relations. On the political front, the United States has been irritated by what it sees as an "overly confident" China. On the economic side, China's revaluation of the yuan cannot satisfy some Americans' appetite for a buoyant rise of the yuan in the range of 20 to 40 percent.

Against this background, some Americans, especially people on Capitol Hill, see President Hu Jintao's state visit to the US this week as an opportunity to increase pressure on China to make bolder progress on the yuan issue. On the Chinese side, however, no giant steps will be taken; the yuan is already on the revaluation track.

To a large extent, the Chinese leadership's cautious attitude toward the yuan is understandable. Many people in the US, including a number of China experts, have failed to realize that like its American counterpart, the Chinese leadership, too, puts employment at the top of its agenda. In the US, the motive is votes. In China, it is social stability.