Counterpoint: is the yuan overvalued?

While I think that often the people who hope for a substantial yuan appreciation have little understanding of what that will mean for them, I'm not sure this thesis is quite on the mark either... but it's tough to say what will happen as capital controls lessen in China (WSJ):

“The free movement of capital is much more likely to result in Chinese capital outflows exceeding inflows, pushing the yuan down and domestic interest rates up,” Ms. Choyleva wrote in the report.

That chimes with estimates by Tamim Bayoumi and Franziska Ohnsorge of the International Monetary Fund. In a paper published last year, they argued that although capital-account opening would lead to massive flows in both directions, outbound capital would dominate. Net outflows could be as much 11% to 18% of China’s GDP, they estimated. That would put downward pressure on the currency.

A weaker yuan would reinvigorate China’s flagging export sector but push up the cost of imports, holding back the transition from a growth model turbocharged by high rates of investment to one that serves consumers.