Nobody wins a beggar-thy-neighbor devalue your currency race to the bottom. That we know. It simply does not work. We found that out in the 1920's. ... Any economist worth his salt will tell you tariffs add costs. Free trade is the cheapest of all, but politics interferes in these things. Politics can get out of control quickly. Currencies are a case of the tail wagging the dog. I do not think the Yuan is terrifically undervalued. In fact, I think it might be overvalued. The whole world thinks it's undervalued and everyone is positioned for it to be undervalued. When everyone is positioned on one side of the boat you might want to explore the other side. The yuan is overvalued because of China's credit problems, the amount of RMB regulators will have to flood in to refloat the system.
~Jim Chanos, founder, Kynikos Associates, CNNMoney.com interview, January 20, 2011