The two candidates vying for the White House have been locked into "yesterday's war" by claiming that Beijing is manipulating its currency, and they risk overestimating the challenge China's economy is posing to the United States. Consulting financial markets adds some perspective.

Check the offshore "nondeliverable forward" market rate of exchanging Chinese yuan into US dollars and you will find the yuan already depreciating six months from now, signaling a reversal into safe havens like the US of capital flows otherwise heading into the Asian economies and currencies. A recent IMF report has indicated a downward currency trend over the longer term.

Once Chinese mainland's currency begins being overvalued relative to the currency market trend, US policy will be forced to flip and be in sympathy, rather than in conflict, with Beijing keeping the exchange rate fixed, or at least stable. Beijing resisted depreciation pressure on its currency following the 2008 financial crisis, keeping the yuan's value fixed for two straight years.