China's currency is on a path of appreciation against the U.S. dollar

A chart showing China's real exchange rate.

China is the fastest growing major economy in the world and is now also the largest single country market for U.S. agricultural exports. Rapid growth in incomes and urbanization are key drivers of China’s growing demand for agricultural goods, and the appreciation of China’s currency—the renminbi—against the U.S. dollar is helping to make U.S. goods competitive in the Chinese market in recent years. During the 1980s and 1990s, China maintained an undervalued renminbi, a policy that supported China’s rapid export growth and accumulation of the world’s largest current account surplus and holdings of U.S. dollar reserves. Since 2006, however, China has followed a policy of modest rates of appreciation of the renminbi, which has become more pronounced since 2008. This chart is based on data found in the Agricultural Exchange Rate Data Set.

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