One of the interesting things about the presidential debate tonight was the prominence of China. Governor Romney repeated his insistence that he would declare China a currency manipulator “on day one”. (I am surprised he didn’t mention the “yellow peril”.) If his criterion is forex intervention, he should be prepared to declare many other countries manipulators as well.
Figure 1: Log real trade weighted Chinese yuan (blue, left scale), and value of Chinese yuan against USD (red, right scale); value for 10/16 (red triangle). A rise is a Chinese currency appreciation. Source: BIS and FRED.
That’s because the Chinese currency has been appreciating, and the degree of estimated undervaluation has decreased over time. Even the Peterson Institute for International Economics, which has been adamant historically, recently estimated a 3% undervaluation. 
“Debbie spend so much American money, you borrow more and more from us,” says a young Asian woman riding her bike through rice paddies at the beginning of the 30-second ad. “You’re economy get very weak. Ours get very good. We take your jobs. Thank you Debbie ‘Spend It Now.’”
For me, this is reprehensible. I am confident that others believe this is perfectly appropriate.