Were China to adopt an exchange-rate regime characterized by a multiple-currency, basket-based reference rate with a reasonably wide band – a policy first proposed by Willem Thorbecke of the Asian Development Bank Institute – the huge surpluses generated within Asia’s production networks would cause the region’s currencies to appreciate together, instead of putting pressure on just one or two, as is happening today. Market forces could then allocate these appreciations across supply-chain countries based on their value-added in processing trade.