US-China currency and trade war: round one to China!

In this paper the attempt is to raise another dimension of trade, namely, the value of Chinese currency vis-à-vis US dollar. One of the main motivations of our paper is to address the prime question of whether the Chinese currency is actually undervalued or has it been appreciating over the years? The current trade war is, at least, in part driven by the nervousness on the part of the USA that the Chinese currency is actually undervalued and, hence, leads to USA having a mounting current account deficit. Our study shows that Chinese Yuan has been growing at half per cent per annum in the past 22 years. China's Current Account Balance (CAB) has remained positive and growing, whereas, USA's CAB has remained negative. There is an 80% correlation between USA's loss and China's gain in share of foreign reserves, which has grown at 9% p.a..in recent years. [ABSTRACT FROM AUTHOR]