Amidst all the speculation that China would have to let its currency appreciate, I predicted at our year-end forecast meeting back in December that China had enough problems of its own (too much productive overcapacity, a real estate bubble waiting to burst, under-stated unemployment), and that it was an export-dependent mercantilist, long accustomed to beggar-thy-neighbour policies, and though the U.S. might like it, I couldn't see how yuan appreciation would further China's own aims; so that China would do whatever it took to keep that export engine of its economy running when the other engines, i.e. credit-fueled unsustainable building bubbles (housing, production capacity and infrastructure), spluttered; so that protectionism and yuan devaluation were much more likely than yuan appreciation.
well, perhaps its already started. Guess the Chinese don't like the fall of the Euro, so are trying to prop it up as best they can ---- and, of course, trying to make the Euro appreciate is no different than trying to make the yuan depreciate.
Rumors That China Is Now DEVALUING The Yuan
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