"In the past few years, many U.S. policy makers and business executives have argued that the Chinese currency, the renminbi (RMB), is undervalued at its current exchange rate (around eight yuan to the dollar)... Thus, the RMB has been under increasing pressure to revalue or float. Is the RMB, however, really undervalued at its current level? This paper addresses this question through basic analyses in terms of purchasing power parity (PPP), balance of payments flows, and portfolio balance." (Quoted from paper)