To encourage exports and support growth, China has kept the Yuan artificially low. One day, China will find that it can’t depend on export-led growth, and it need depend on its middle class to sustain growth. When the Chinese realize this and allow the Yuan to appreciate, their middle class consumers will be able to afford more and buy more. Right now, I can buy the Yuan and Yuan-generating assets on the cheap. When the Yuan rises to its rightful place among the leading global currencies, I am sure to make a killing.
The Yuan is grossly undervalued. Any Yuan-denominated investment (money market, bond, dividend paying stock) is surely to create wealth as the Yuan rises. Knowing one day that the Yuan will be another Yen, Dollar, Euro or Sterling is no cold comfort to some of you, given the fact that these are all fiat currencies. But, if I get paid in fiat trash, I want it to be the fiat trash that depreciates the least.