The experience of the East Asian economies in the 1980s and 1990s can provide some guidance. Japan, Korea, and Taiwan faced similar appreciation pressures but at a time when they were far richer than China is today. When Japan revalued its currency between 1985 and 1995, the Japanese corporate sector boasted Sony, Toyota, and Honda. These extremely capable and agile Japanese firms rolled out new products, upgraded their technology, and moved production offshore to digest the costs of the revaluation.
