China's exchange rate affects its surplus and the US trade deficit. A small increase in China's currency value could reduce its surplus and improve the US deficit. If China's currency appreciates by 10%, its surplus could decrease by $170-250 billion yearly, benefiting the US by$22-63 billion annually. To sustain this improvement, China needs to gradually increase its currency value by 2% each year. Efforts to boost domestic demand in China are crucial to prevent a growing surplus and inflation.