(China is in a jam. They have 2 billion in foreign exchange reserves but they can't spend it in China. Since China is a closed system in order for the PBOC to spend dollars in China they first must convert dollars into yuan by selling dollars to buy yuan. However, since it is a closed system the end buyer of the dollars that the PBOC is selling to is in fact the PBOC. PBOC can spend yuan by either printing or borrowing.
To make matters worse they announced a 4 trillion dollar plan without making sure everyone got the memo, hmmm top officials being reactive and announcing big bailouts, and now they need to come up with it.
China bags GDP in good times and stuffs it in bad, a sort of turbo charged United States, and this looks like a bad period coming up. They will have to dig deep to keep their GE impression of 'beat the number' intact.
They want to depreciate that yuan against the dollar but their future serfs are getting feisty. First the French guy who is going to be President of America wants some appreciation, and then the American guy who is running France, and now one of their up and coming vendors? - AM)
OTTAWA, Nov 20 (Reuters) - The Canadian government reiterated a call on Thursday, ahead of this weekend's Asia-Pacific summit, for the revaluation of exchange rates of key Asian countries including China.
A senior government official, briefing reporters on the upcoming summit, said a number of world leaders had raised concerns over global imbalances and said exchange rates were one of the factors.
He said rates would "need to move in appropriate directions".