Qiushi, a journal of the Central Committee of the Chinese Communist Party, published an article on August 8, 2011, titled “Be Alert to Possible U.S. Pressure to Depreciate the Chinese Yuan.” The article is based on the words of Hong Kong’s famous economist, Prof. Lang Xianping. “According to Lang’s friend who is in a U.S. economic decision-making group, the U.S. is developing a major strategy to suppress and devalue the Chinese yuan.”
Recalling how the U.S. forced Japan and the “Four Little Dragons” (Taiwan, South Korea, Hong Kong, and Singapore) to appreciate their currencies first and then devalue their currencies by selling their real estate and stock, the author accused the U.S. of “looting the fruits of economic development” of these countries. The article states, “China’s local governments have over 10 trillion (yuan) in debt. China’s real estate market bubble and high inflation result in the yuan appreciating outside of China and the yuan depreciating inside China, which is obviously contrary to the laws of the market. The laws of the market are irresistible. This is precisely the reason why the United States may devalue the Chinese yuan.” At the end of the article, the writer expressed the belief that China will have the wisdom to deal with the possible pressure from the U.S. and Western countries to depreciate the yuan.
Sorce: Qiushi Journal, August 9, 2011