Capitulation.

Very close now.

March 24 (Bloomberg) -- Chinese executives are joining U.S. President Barack Obama in backing a stronger yuan, even as Premier Wen Jiabao says the currency isn’t undervalued.

Yang Yuanqing, chief executive officer of Beijing-based computer maker Lenovo Group Ltd., said appreciation would boost consumers’ purchasing power. Qin Xiao, chairman of China Merchants Bank Co., said an end to the yuan’s 20-month peg to the dollar would let lenders set market-based interest rates. Chen Daifu, chairman of Hunan Lengshuijiang Iron & Steel Group Co., said a stronger currency would cut import costs.

While the comments conflict with Wen, who said March 14 that criticizing the exchange-rate policy amounted to “protectionism,” they are in line with traders who expect the government will let the yuan appreciate later this year. U.S. lawmakers have called on Obama to use the threat of trade sanctions to force an end to a currency regime that they blame for making their nation’s manufacturers uncompetitive.

ALSO (note my emphasis as China gets a Director of Fed Ex to say "hey, it does not really mean anything to carry this label):

US likely to label China 'currency manipulator'
By Ding Qingfen (China Daily)

BEIJING - The US Treasury Department is highly likely to label China a currency manipulator in a report due out in mid-April, but the move will be "more symbolic than substantive" to win mid-term Congressional elections in the fall, former US trade representative Susan Schwab told China Daily on Tuesday.

US likely to label China 'currency manipulator'

"There is a high possibility, definitely (that China will be labeled as a manipulator), but it is very important to remember the decision is largely symbolic and does not force any actions, other than consultations," she said.

If that were the case, it will be the first time in 16 years. By declaring China a currency manipulator, the US could slap additional tariffs on imports from the country.

Some Chinese experts strongly doubt the US will do so as it will provoke Beijing and jeopardize its most important trade relationship, while others believe that even if China were declared a currency manipulator, Washington will not follow up with punitive measures.