China: Keep Them Waiting

Blimey, Morgan Stanley's Andy Xie had an interesting post about the renminbi last Friday. Basically Xie doesn't think a revaluation is to be expected in the near future. It is the reason why he thinks this that is interesting: he thinks it is the expectation – not the reality – of imminent Rmb revaluation that is in China’s interest at present. Xie feels a revaluation may cause a lot of hot money to leave and, hence, the property market to collapse. On the other hand, elevated expectations of imminent Rmb appreciation could prevent panic selling and help stabilize the property market. Certainly full marks for being original.