[AzDesertRat]

That's more or less true. They artificially support their currency by buying and selling dollars to keep the yuan in a tight range. It works if you have the capital, but as Argentina found out a few years ago, it has it's consequences. A lot of the countries in the Persian Gulf do this also, but they have the aforementioned capital to do this.

IMO, the Chinese yuan is probably undervalued by ~10% or so and needs some minor tweaking. Those people and politicians that are calling for China to allow its currency to float are [censored] in the head. They either have a half baked notion of macroeconomics and international finance or are trying to get elected on this ill conceived idea. The shocks that this would send to the world truly be staggering.

I wonder if they would resign when confronted with this failure or will they cry out "who could have seen this happening" [img]/images/graemlins/shocked.gif[/img]