As policymakers weigh how a possible yuan appreciation would affect the nation's importers and exporters, they have wisely turned to the use of stress tests that simulate what would happen if the exchange rate were to rise.

While many Chinese exporters, especially those that depend on labor, stress their vulnerability to any significant appreciation of the currency, the authorities should balance that with the benefits of a stronger yuan for Chinese importers.

More importantly, they should keep in mind that the yuan's exchange rate is not merely a trade issue. And any decision on revaluating the yuan must also account for its impact on the Chinese people.

Reportedly China conducted a round of stress tests to see if Chinese exporters could withstand a yuan appreciation. Not surprisingly, the initial results were not encouraging: A 3-percent appreciation would wipe out a substantial part of the thinning profits of Chinese manufacturers while leaving many small- and medium-sized exporters in the red.

Undoubtedly, the predicament of exporters is a cause for concern. Yet, as China swallows up imports from the rest of the world at an accelerating rate - growth in imports is set to stay ahead of the pace of exports - policymakers must weigh more carefully the disadvantages of appreciation against the potential benefits for importers and the national economy.

The revaluation of the yuan also needs to be considered from the perspective of the people. The implications of a stronger yuan can be very different for various income groups. While the rich will enjoy a greater purchasing power from a yuan appreciation, the multitudes of the poor would have to bear the consequences of rising costs and fewer job opportunities.

The currency exchange rate is no cure to the widening income disparity. But its revaluation should not exacerbate the problem.