Revaluation of the renminbi would make it more expensive for foreign firms to establish themselves (or expand) in China – the world’s most dynamic market – and would render exports of foreign affiliates, which account for 54% of total exports, less competitive internationally. On the other hand, the increased cost would be offset to some extent by lower-cost imported inputs, and foreign affiliates could expect to repatriate higher profits from sales in China in terms of their own currencies.