Hello Taikun, I think:
(1) The woosh into China is already and certainly accounted for by the current exchange rate scheme,
(2) A good-ly part of the woosh into China is comprised of (a) Mainland China money playing the China heat via offshore vehicles, and (b) overseas Chinese money riding in the wake of (a) and (c) overseas Chinese money acting on own initiative.
I think (a), (b) and (c) may account for 50-60% of total FDI flow into China, and
(3) The pentup woosh out by W3C is not accounted for by the current exchange rate scheme, because it cannot happen yet in any decent sums.
If above (a), (b), and (c) believe that W3C money will be heading out, they will play the initial pop of the RMB against any and all currencies, but will also quickly decamp the scene of the deed before W3C becomes W2C, and relatively quickly, in short order, try to front run W3C, before W3C can organize to become W2C, and before the authorities can crank up the printing machine.
Chugs, Jay |
