Chinese inflation is running consistently higher than American inflation, which is scarcely above 1%. That translates into rapid real appreciation despite the slow movement in the nominal exchange rate. And that should produce a decline in Sino-American imbalances, which seems to be emerging.
Ryan Avent can correct me if I am wrong, but I suspect some of that run up in Chinese inflation is the result of QE2. Chinese monetary authorities are forced to create more yuans to buy up the new QE2 dollars in order to maintain the crawling yuan-dollar peg. The actual and expected increase in yuan, in turn, is contributing to the rise in China's inflation rate. In short, China is importing the Fed's QE2-driven monetary policy. If this real appreciation actually leads to meaningful rebalancing in the global economy, then QE2 may be what ends Bretton Woods 2.