Barack Obama got roundly pilloried for failing to get China to move on the dollar-renminbi peg. Now Tim Geithner, the US Treasury secretary says he is hopeful of more flexibility next year. The Chinese still seem unmoved.
Mr Obama is under pressure, of course, from US manufacturers who believe the renminbi peg is gifting Chinese factories an unfair competitive advantage.
But if you strip away the emotion and politics and look at the two currencies with the cold logic of economics, then the peg makes plenty of sense, according to Jerry Lou, a strategist at Morgan Stanley.
He argues that if China revalued its currency, or even made it fully market-driven, it would stop buying the US dollar.
At the moment, China buys dollars, or dollar-denominated US Treasury bills, in order to maintain the fixed exchange rate and to build up reserves in order to buy oil and commodities in the future, which are, of course, priced in dollars.
If China freed its currency, it would probably start settling its trade in renminbi, rather than dollars. Indeed, the renminbi could become the world’s dominant currency. The government is already moving to create a renminbi-priced market for oil.
And what is more important to the US? Does it need to create more manufacturing jobs, or does it need a buyer of US Treasury bills in order to fund its government deficit. The answer, according to Mr Lou, is that China’s role as a ready buyer of US debt is more important than creating "potentially uncompetitive manufacturing jobs".
His analysis is likely to be cold comfort to the workers in the Midwest, but it does make plenty of sense. His call is that the peg is unlikely to move until the middle of 2010 at the earliest. "The US is unlikely to encourage China into quicker currency reform, because it would not serve US interests to do so," he says, bluntly.