Agree, mid-next year is the earliest possible time that China will do something about the exchange rate. And I think there are two possibilities, either widening the trading range, or revalue Yuan upward for, say 10%, all at once. The benefit of the latter can prevent the currency traders do some damage. I personally prefer the later. Like the devalue in 1994, China did 30% all at one time.
And I don't think it will float RMB before the WTO deadline (I don't remember exactly when? 2006 or 2007), and even if when deadline comes, China can say something like not prepared yet, so can extend the deadline. But it is true the stake is very high for most of people's interest in the world, and millions of Chinese' lives will be in danger in case something messed up.
That when China will completely float RMB will depends on how their financial system reform proceeds. It won't be easy<g>
About a basket of currency, seems that technically, it is very hard to develop such a system, although theoretically, it is a good idea<g> |
