Increasing capital inflows weigh heavily on import-substituting and export sectors, and may even wipe them out if the appreciation is substantive and protracted. Some economies may sustain collateral damage from both sides of the war, because, in addition to the pressure coming from excess dollar liquidity, they may be confronted with tougher competition (domestically and in third markets) from China, so long as the renminbi remains quasi-pegged to the dollar.