Today China is spending about 1% of its GDP a month to keep its currency from appreciating - it is on track to spend about 15% of its GDP fighting appreciation this year.  And unless something changes, it will do the same next year.

China is on track to run a current account surplus of at least $120 billion (and probably more -- $150b is not out of the question, though much depends on whether oil import volumes pick up).  It will probably attract about $60 billion in (net) FDI this year.   That generates a $180 billion surplus in the fx market at the current exchange rate.  

That surplus could be used to finance the outflow of hot money - think bank depositors trying to get out of bad Chinese banks.   But it is not.  Right now, hot money is flowing into China.  So China's reserves are on track to increase by much more than $180b, or even $200b.   $275-300 b is a realistic range.

That is why I am bit skeptical of claims, including the claims made by a former Bush Administration Commerce Under Secretary, Grant Aldonas, that if China got rid of its capital controls, the RMB would depreciate. 

Hello 10% of GDP Chinese trade surpluses.  Hello 30% y/y export growth for the next three years ...

No doubt, China's capital controls have a big impact on the operation of China's exchange rate regime, and thus on the pressures on China's "de facto dollar peg disguised as a managed float."  The controls work both to keep Chinese savings inside China, and in the Chinese banking system - and to keep outside investment out of China.  They wall China's financial system off from financial globalization.  

But I do not think the controls are all that stands between China and a big fall in the RMB.  Rather,  I would bet that the RMB would rise if China's controls were lifted and China's central bank stopped intervening in the foreign exchange market.