The Dharma Bum wrote:The point is more that they are afraid of capital flight, and are seeking ways to preserve their wealth. The result is the emergence of the shadow banking sector and stuff like bitcoin. They are desperate to preserve their wealth and will take great risks to do so. The reasons for this development can be analyzed.
China normally keeps the yuan undervalued in support of it's export sector but has yielded to international pressure and let it appreciate recently. There has been a gain of 2.5% against the dollar so you are correct in saying that. But overall the forces that create this pressure on the market are still fundamental to China's economic situation and the devaluation of our own currency must be taken into account as well.
http://fordhampoliticalreview.org/china ... imbalance/
Still doesn't make sense to me. China has a very high investment % which is frankly more troubling than capital flight. It's suggestive of a dependence on debt, especially government debt as the country continues to target growth rates in order to maintain social stability.
http://www.brookings.edu/blogs/up-front ... ies-dollar