EARLIER this month eight American senators proposed a law to punish China and other countries for keeping their currencies artificially cheap. Two of the bill’s sponsors—Lindsey Graham, a Republican, and Chuck Schumer, a Democrat—have been complaining about China’s weak currency for a decade: they wrote an angry letter on the subject to America’s treasury secretary back in July 2003. But although their criticisms have not changed over the past ten years, China’s currency, the yuan, has changed a lot. Long criticised for its cheapness, weakness and competitiveness, China’s currency is now looking uncomfortably strong. Some economists even wonder if its overvalued. Why?
