Fund manager on Chinese currency re-valuation

Rudolph-Riad Younes co-manages the $14.5 billion Julius Baer International Equity Fund. Here are key extracts from an interview he did with Barron's (subscription required):

On China

....All the overinvestment is going to lead to deflation in that economy.

On Chinese currency re-valuation

....It was 2%. It was a small step, a small gesture. On a non-news day, the yen and the euro move 2%. So it is nothing. Given the wage gap that exists between the U.S. and China , it is nothing. From a debt perspective, it is detrimental to the Chinese economy because suddenly every corporation in China that is highly leveraged will suddenly see their debt go up 30%-40% if their currency goes up 30%-40%. But more and more of the adjustment will fall upon us, because China is too powerful a force. We can't go to war with them. We can try global protectionism, but that will hurt us.....

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