An article in WTOP news says that some areas of Chinese industry are surprisingly vulnerable to the currency exchange rate:
A rise of 10 percent in the yuan could lead to the loss of 5.5 million jobs in China, according to a report by the Chinese central bank. It said companies hardest hit would be those that make textiles, furniture, shoes and toys for export.
"If the yuan rises by another 5 percent, our profits will be totally wiped out," said Li Shaoxiong, deputy general manager of the Fujian Ala Shoe Co., which sold half its 2006 output of 6 million pairs of athletic shoes to American retailers.
Beijing is counting on such labor-intensive light manufacturers to create millions of new jobs. Even though its bustling economy is expected to grow by more than 10 percent this year, a big share of that is in heavier manufacturing and other industries that create fewer jobs.
Perhaps China will take the view that it can tolerate a rise in foreign-trade-related unemployment while it continues to amass capital; as the East gets richer, it will eventually generate its own demand for the products of light industry.