China's revaluation of its currency came as something of a surprise. Beijing has been under considerable international pressure to increase the value of the yuan, but Chinese economic officials had countered that doing so was not yet in their country's best interests. The change in position reflects a political, rather than an economic, decision. Although there is likely to be little real impact on Chinese trade, the move does show Beijing's sensitivity to the concerns of its trading partners.

China first pegged its currency to the U.S. dollar in 1994. In 1997, during the Asian Financial Crisis, Beijing let the value float to 8.277 yuan per dollar, where it has remained ever since. That stability has been a key part of China's economic success: A fixed and transparent exchange rate has bred confidence in investors who have been reassured that their projects will not be subject to arbitrary swings in currency rates.

But China's blistering annual growth of up to 9 percent, which has depended greatly on exports, has yielded a massive trade surplus, mostly with the United States. That, in turn, has generated criticism that Beijing has kept the value of its currency artificially low to make its products more competitive, thereby forcing job losses in the U.S. and other countries that trade with China. This chorus of complaints has been growing louder, with U.S. congressmen threatening legislation that would impose new tariffs on Chinese goods.