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During 1980-2008, the Chinese government followed a successful policy of increasing the productivity of the country’s tradable sectors much faster than was the case in the rest of the world. If this policy had continued over the 2009-2016 period and if the productivity in China’s non-tradable sector had grown at the same rate as that in the rest of the world, what would have been the impact on the real exchange rate of the Chinese currency, the yuan, vis-à-vis the US dollar?
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