BMI has long-warned that expectations of Chinese yuan (CNY) appreciation are not fundamentally sound, and back in October, my colleagues and I anticipated that the yuan would be re-pegged to the US dollar as the Chinese economy slowed. We now increasingly recognise that a devaluation in the CNY/US$ spot rate could happen in 2012, or… [Read more]
China’s 2010 real GDP growth figure came in at 10.3%, slightly exceeding BMI’s revised forecast of 10.2%. With no breakdown of the data available as of yet, I can only conclude that growth momentum ended 2010 on a stronger note than expected (by ourselves and the market). Data on retail sales, which rose by 19.1%… [Read more]
It’s only Tuesday and two key things have happened in China already this week. Xi’s Got The Look… The first was Vice President Xi Jinping’s appointment to the post of vice-chairman of the Central Military Commission (CMC). This was no surprise, for Xi has long been considered the heir-apparent to succeed Hu Jintao as Communist… [Read more]
The US Federal Reserve has declared war on deflation by announcing QE 2.0, taking the ongoing competitive debasement among major central banks to the next level. Not only has this seen the US dollar weaken sharply against FX majors, such as the euro, Japanese yen and the Swiss franc, but perhaps even more notably, the… [Read more]
The future movements of the Chinese yuan have been one of the most hotly debated issues in the global economy for many years. The initial 2.1% revaluation of July 21, 2005, after a decade at CNY8.28/US$, was almost as eagerly awaited as the release of the first Star Wars prequel, and like the latter, it… [Read more]
Let’s rewind two years, to a time before ‘credit crunch’, ‘quantitative easing’, ‘TARP’ or ‘staycation’ had entered the popular vocabulary. I’m talking about a time in which the term ‘currency manipulator’ was part of the zeitgeist of US-China economic relations. Today, G20 summits come and go without this phrase, which once seemed almost ubiquitous, being… [Read more]
During Brazilian President Lula’s recent visit to China, the leaders of the two countries have been discussing, among other things, the prospects of abandoning the US dollar in bilateral trade operations. This would mean that Chinese importers would purchase Brazilian goods in Chinese yuan, and vice versa. Personally, I couldn’t agree more with former Brazilian… [Read more]
