Hu Jintao has authorized a baby step revaluation of the yuan, 2.1%.
Presumably, this will keep China under the radar when the US Treasury
again reviews currency management in Sept. '05. Hu is hard to take
seriously and Treas. boss Snow will look equally silly if the US
does not hammer China this autumn for damaging currency manipulation.
The dinky revaluation of the yuan sets promise of further dinky
ones to come. This will keep the speculative money flowing in and
will feather the nests of the Beijing power elite.
If this is the plan, US business and other foreign companies can
continue to invest in China with a wink from Snow.
Risk will rise even higher in China as more money flow will further
tax an already overburdened and corrupt financial system. Prospective
upward revaluations of other Asian currencies against the dollar
will up speculative flows to these spots as well, such as Malayasia.
Hu will be headed here some time over the next month or two. He
has earned the frostiest of greetings, but don't count on him
receiving such.
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