Under pressure from military hawks and protectionists in the United States, China blinked and "reformed" its exchange rate regime on July 21. The governor of the People's Bank of China, Zhou Xiaochuan, and America's treasury secretary, John Snow, hailed these reforms as a positive first step. But in less than a week, the People's Bank issued a "Solemn Statement" (see page 52) that threw cold water on the notion that the first revaluation step would lead to others. Indeed, the People's Bank ruled