The last time US unemployment hit double figures was in the early 1980s, when one of the hit films was Red Dawn, a tale of a frustrated Soviet invasion of Colorado that played on the economic insecurity of the time.

With the number of people out of work hovering around the same level again, Red Dawn is being dusted off for a remake. Except this time it is the Chinese, not the Soviets, who are the baddies. The film begins with the Chinese army taking over Detroit.

In such a climate it should come as no surprise that China’s currency is becoming a hot-button political issue again.

Barack Obama, president, recently intensified his calls for China to revalue its currency, arguing that more exports to Asia would mean “hundreds of thousands, maybe millions of jobs here in the US”.

An estimate by the Peterson Institute of International Economics that the renminbi is undervalued by 41 per cent against the dollar was widely picked up in the US, adding to the popular view that China has a large and unfair advantage coming out of the crisis.

Financial markets are also buzzing with speculation that China is about to make a currency move. Jim O’Neill, the Goldman Sachs economist and “Brics” guru, caused a stir last week when he said “something is brewing in Beijing”.

This is not the place to rehearse the arguments about appreciation, other than to say that they are becoming stronger as Chinese inflation rises. And the Peterson Institute was not actually recommending a 41 per cent appreciation, but only trying to put a number on the level of undervaluation. Most economists expect only a very modest increase in the value of the renminbi.

Yet it is worth pointing out that a revaluation of that level would actually exacerbate the very fears behind a film such as the new Red Dawn. Aimed at levelling the playing field, it could instead change the way many people think about China.

The Chinese economy is currently the third largest in the world measured in dollar terms, just behind Japan. A 41 per cent appreciation in the renminbi would catapult China way beyond Japan and leave it half the size of the US. When Mr O’Neill forecast that China would overtake the US by 2027, some scoffed. All of a sudden those guestimates would start to look a lot more on the money.

The US dwarfs China in spending on research and on its military and will do so for years to come. But after a big revaluation, China’s budgets in these areas would be equivalent to about a quarter of those in the US – enough to seem like a real competitive threat.

One of the things that would not change is the value of China’s mammoth foreign exchange reserves, which have been the subject of so much misplaced angst about Beijing becoming the US’s banker. But what about China’s commercial banks? ICBC was already the biggest bank in the world last year by market capitalisation: after a 40 per cent currency appreciation its mainland shares would give it a market value double that of JPMorgan Chase, the biggest US bank. PetroChina would be one and a half times the size of ExxonMobil. No prizes for guessing what US investment bankers would be telling Chinese companies.

By this stage, economists are probably grumbling that exchange rates only reflect relative prices and that a big appreciation would not give the Chinese government a single renminbi more to spend on scientists or soldiers.

But there is a bigger point. When some of the more extravagant claims about “China’s century” are made, plenty of people – myself included – often point to the many obstacles ahead and stress how poor a country China still is. Yet maybe the fact that the currency has been kept so artificially low has obscured just how far China has already come.

The revamped Red Dawn says something about the anxieties that China is already provoking. With a stronger currency China would loom even larger in the US consciousness. It would reinforce the perception that China is not just a rival for the distant future but is swiftly becoming an economic and military match for the US.

The phrase “be careful what you ask for” works as well in Chinese as in English.