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Thread: How far will RMB go?

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[quote=JIMMYB,268417]"Chinas Government is not ready for it."

Exactly, JCL. China is very careful on the issue of RMB appreciation. Quick RMB appreciation is bad for China. As GARYKINKADE analysed, the appreciation of the RMB will make consumer prices for the Chinese increase. If wages and employment could keep pace with RMB appreciation, there would be no problem. But the reality is that wages don't increase very much though the CPI is very high. On the other hand, dollar has been depreciating very much after the US Fed cut the interest rates again and again. This pushes RMB to appreciate faster. I wonder if US intentionally cut the interest rates to make dollar weaker and weaker so that RMB will appreciate very quickly. It is what US expects.

Why does China refuse many foreign investors to enter Chinese domestic market? China doesn't want too much money to flow to its domestic market. Inflation is starting to appear. That more and more money have flowed to China will worsen the situation.

Why did Brown position Britain as China's premier international business partner and welcome Chinese investors to invest in London? At present, the world economies are depressing. However, Chinese economy is still developing. Brown just wants to develop British economy with the help of China.[/quote]

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