A one-time yuan appreciation of 10% and 20% against the US dollar in the second half of this year would not significantly reduce the US trade deficit with China, but it would cool China's overheating economy, the Wall Street Journal reported, citing a study by the Asian Development Bank. ADB said a revaluation of 10% could "considerably stabilize China's overheating economy", but an appreciation of 20% or more "nearly halves GDP growth, risking a hard landing" for China. A 10% appreciation would reduce China's trade surplus by US$15bn in 2006, while a 20% appreciation would decrease it by US$32bn, the study said.
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