Why Chinese exports increased even though Yuan appreciated after the Chinese removed the peg against USD? After the Chinese central bank removed the peg against USD, yuan appreciated but Chinese exports didn't seem to be affected. They are steadily increasing. How can this be explained ?
Simple answer: Drawing on Ricardian model I can say the Chinese have not lost their comparative advantage in producing many types of manufactured goods. Yuan, on its way to appreciation, has to walk a few more miles to affect the comparative advantage that the Chinese possess.