The Renminbi has been revalued but the change won’t keep the
congressional wolves at bay for long, according to Ray Block.
Meanwhile, following China’s ongoing strong growth, our commodities
guru, Nick Raffan, sees positive long term signs for

Ray Block writes:

China’s unexpected revaluation of the Renminbi (Yuan) as
from 9pm on Thursday July 21 Beijing time has been welcomed around the
world, although the change of 2.1% is so tiny that it won’t
satisfy US Congressional critics for long.

Already in the nondeliverable forward foreign exchange market (NDF),
where currencies regulated by strict capital controls, such as China
and Taiwan are traded, the NDF market is pricing in a further
revaluation ranging from 2.5% to 6%.

Read Ray Block’s full article here.

Nick Raffan writes:

Once again China upset the sceptics recording a blistering
pace in GDP of 9.5% for the first quarter. The strength of Q1 GDP
surprised most pundits. China’s President Hu Jintao recently
delivered a bullish speech at the opening of 2005 Fortune Global Forum
at the Great Hall of the People in Beijing. Hu Jintao said: “By
2020, we will quadruple China’s GDP of 2000 to approximately four trillion
US dollars with a per capita level of some 3,000 US dollars, and
further develop the economy, improve democracy, advance science and
education, enrich culture, foster greater social harmony and upgrade
the texture of life of the people.”

The US became a “two trillion dollar” economy a few years back. If
China progresses to a US$4 trillion economy within 14 years, that pace
of growth is extraordinarily positive for the resources industries.

Read the Raff report on commodities and fixed assets here.

Peter Fray

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Peter Fray
Editor-in-chief of Crikey