The exchange rates of the Chinese yuan affect the prices of imports from the US and Japan. A 1% increase in the yuan's value leads to a 0.23% rise in US import prices in the short term and 0.47% in the long term. Japanese import prices increase by 0.55% in the short term and 0.99% in the long term for the same yuan appreciation. This effect is seen across different sectors like food, raw materials, apparel, manufacturing, and machinery. However, the high impact on Japanese imports is due to the yuan being pegged to the US dollar for trade with Japan. Overall, a moderate yuan appreciation has little effect on China's trade surplus.