RMB has already appreciated from a low of ~7.35 to the dollar to ~6.97, in the last 10 months. That's an appreciation of ~5%.
Currency isn't the only instrument of policy. For example, if you want to maintain domestic manufacturing's share of consumption and not raise manufacturing imports, you can use tariffs or subsidies to offset the effects of currency appreciation. The same is true of exports - if you want to make Chinese products more competitive overseas without depreciating the currency, you can use export subsidies. Ultimately, a system where by China buys commodities (ie raw materials, which by definition can't be made in China) at higher purchasing power (via currency appreciation), but exports finished products just as cheaply (via subsidies), is not really worse than the current system.
The thing to be cautious about, though, is capital flow. Ironically, an appreciating currency facilitates emigration and capital flight because it makes it easier for Chinese entities (house holds, companies, etc.) holding RMB (or assets in RMB) to invest overseas. This is exactly what happened during the Plaza Accords, when Japanese companies and house holds went on a buying spree around the world with their superior currency and assets bubble.
Against import tariffs, Chinese house holds and companies would be incentivized to take their buying power out of China. This will, of course, be balanced by higher amounts of foreign investment looking to leverage an appreciating currency, but the trouble with that, of course, is that foreigners will then control a higher % of your economy and may end up creating an investment bubble that'll subsequently pop and lead to a "lost decades" type of situation. You can try to arrest this by imposing tighter capital controls, but in my experience, Chinese people are very proficient at evading any type of capital control.
The Plaza Accords without question contributed to the lost decades in Japan. But Japan had less tools at its disposal - the US wasn't going to let Japan impose tariffs or heavily subsidize its exports, when the whole purpose of the Plaza Accords was to reduce the competitiveness of Japanese manufacturing relative to US manufacturing. China is better positioned here to have its cake & eat it too - ie up lift its purchasing power on commodities, while retaining price competitiveness on exports, since it doesn't need to answer to the US. Yet it must be managed correctly, or else it'll open the door for competitors like Vietnam and India to really super charge their export games.
