Les, re: China, yuan devaluation: it will happen sometime this year, of this i have no doubt. i pointed this potential pitfall out in a post about a month ago. i don't remember the numbers, but the last sector of China's economy that had been performing well, namely exports, is supposedly crumbling. the communist party is loath to do anything that might cause social upheaval and is therefore reluctant to implement wide-ranging, but necessary, reforms. it will try to take the easy way out, which is devaluation. i doubt that any 'secret pacts' exist that links China's accession to the WTO with a pledge not to devalue. if they do devalue, the risk is that a run on the HK$ will follow, the peg will fall, and global financial crisis part two will be underway.
regards,
hb |
