That day is coming soon.  Indirectly because of money, but, IMO, more because of the one child policy.

the yuan gets weaken last 2 days. there will be more noise from the US if this continue.

The Chinese economy, although growing rapidly even through this global recession, is still very heavily influenced by the US and British. Although they may appear to show strong resistance to being manipulated by the US in regards to the appreciation of the yuan, there are many factor that could help set their economy back if they outright refuse, at current they are playing passive by buying themselves time.

They have heavy investments in the US economy, and sanctions would make an impact on their growth no doubt.

Crap... the USD-RMB exchange rate is already down at 6.79 today.
For the past few years it fluttered between 6.80 to 6.83

slowly but surely it is on the long road down.

Pulled this little nugget of information from my newsletter.

My reading of this is that the Chinese will be able to appreciate their currency slowly as they withdraw from U.S. bonds, thereby minimising collateral damage.

If it goes down as this guy predicts and there's no one to replace the Chinese, then we could be seeing things get much worse in the U.S.



--On an entirely different note, data out from the U.S. government last week showed official Chinese holdings of U.S. Treasury bonds from $938.1 billion September of last year to $843.7 billion in June of this year. That's an 11% decline. How about that?

--By not rolling over or adding to their U.S. bond holdings, the Chinese slowly reduce their vulnerability to a weaker U.S. dollar. They also, you'd think, slowly dial back their position as the largest creditor to the U.S. government. And who is buying the bonds the Chinese are buying less of?

--If it's the Federal Reserve, isn't that a rich irony? The Fed would effectively be covering China's retreat from the dollar. It would allow China to gradually exit is dollar position without causing a panic. And meanwhile, the end result - the destruction of the U.S currency - would be accomplished vie debt monetisation by the Fed. Pretty nifty. Nice work Fed.

[ Last edited by  atomic3d at 24-8-2010 06:21 ]

Need to get up to speed o what the issuance of yuan bonds means.  Now companies can issue in yuan, so for example mcdonalds did it.  And the bonds will trade also?

yes the bond will trade as well. the issuance of yuan bonds can help HK to offer more yuan financial products, which should help HK as financial city.