The opportunity cost of a forgone tax base may outweigh perceived gains, especially where artificial currency pegs and manipulations are present to distort trade.
Given the centrally planned nature of the economy, the central bank can do a number of things to curb the inflationary nature of maintaining the currency peg.
Earlier this year, authorities announced a surprising liberalisation of its currency peg with the dollar - allowing the renminbi to float in a wider range against the greenback.
Crime has continued to grow as a considerable social concern in the aftermath of the 2001 recession and a reversal of the currency peg where hyperinflation ensued.
Absent currency manipulation or a currency peg, appreciation of the currency can damage other sectors, leading to a compensating unfavorable balance of trade.