HeF

The Chinese Capital Outflow Paradox

Unlike Vietnam China has an undervalued RMB, a large current account surplus, and reserves equal to at least five times its exernal debt. At some point things can change, of course, but I suspect we are at the beginning of a long-term revalution of the RMB. If policy-makers don't screw it up (a very big if, given their policy responses so far), i don't think we will see a repeat of Vietnam.