Careful investors are watchfully waiting to see what will happen with the RMB over the next couple of months.<\/p>\n
As the Chinese government is the largest holder of US T-bills (there was a recent news article indicating otherwise, but by combining holdings\u00a0between the\u00a0Mainland and the Special Administrative Regions, it still is the largest holder) as well as the controller of its currency.\u00a0 For the government,\u00a0a balance has to be struck between the value of China’s t-bill holdings (government investment) and the welfare and \u8d2d\u4e70\u529b (gou4mai3li4 – purchasing power)\u00a0of its citizens.\u00a0 A successful \u5bf9\u51b2 (dui4chong1 – hedge\/[hedging]) strategy must be struck.\u00a0 One individual strategy I heard was to\u00a0use one’s RMB to buy\u00a0\u9ec4\u91d1 (huang2jin1 – gold) or \u767d\u94f6 (bai2yin2 – silver) and keep it in a \u4fdd\u9669\u67dc (bao2(3)xian3gui4 – safety deposit box).\u00a0 What this does is it permits a liquid holding which is independent of the prices of currency.\u00a0 From there, depending on what happened\u00a0in different\u00a0\u9886\u57df (ling3yu4 – region), one could rapidly convert his\/her gold\/silver into the target currency, wait until a trend develops with both the price of the heavy metal and the direction of one of the currencies,\u00a0and then convert from the metal to the upward-trending currency.\u00a0 However, this requires keen reading into \u5b8f\u89c2\u8d8b\u52bf (hong2guan1 qu1shi4 – macro-scale trends), which is\u00a0not a common skill.\u00a0\u00a0A recent analysis by the Financial Times\u00a0noted that\u00a0the Chinese government\u00a0has arranged this currency move ahead of the G20 meeting.\u00a0\u00a0The\u00a0Chinese government\u00a0will not\u00a0\u5c48\u670d (qu1fu2 – give in [to demands])\u00a0when there are\u00a0high-speed backroom arrangements made at\u00a0international meetings.\u00a0 Doing it before\u00a0the meeting\u00a0increases sovereignty in decision making.\u00a0\u00a0In the meantime, anyone working in the mainland who travels frequently to the US should opt to be paid in RMB.\u00a0 It could end up being a daily \u63d0\u5347<\/strong> (ti2sheng1 – raise), now that’s\u00a0a reason to work overtime!<\/p>\n","protected":false},"excerpt":{"rendered":" Careful investors are watchfully waiting to see what will happen with the RMB over the next couple of months. As the Chinese government is the largest holder of US T-bills (there was a recent news article indicating otherwise, but by combining holdings\u00a0between the\u00a0Mainland and the Special Administrative Regions, it still is the largest holder) as…<\/p>\n