Belief that China's yuan is undervalued, giving the country an unfair advantage in global trade, has been a sore spot for the U.S. for some time, but the concern grew when unemployment kept increasing in the U.S. China has pegged its currency to the U.S. dollar at 6.83 to the dollar since July 2008. What has been largely overlooked is that China already is experimenting with floating the yuan, in Hong Kong. "The currency is more or less already convertible in Hong Kong," said Julia Leung, undersecretary at Hong Kong's Financial Services and the Treasury Bureau. "This is a good way of testing international demand."

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