China crisis?

[Bangkok]

If China let the Remenbi partially float, what is the likely impact on each of the US Dollar and the Euro?  China hold a vast amount of dollars and have a huge trade surplus

[Didwot]

Nobody else seems to want to answer. In fact the answer is contained in the last words of your question, trade surplus. The Remenbi would rise in value, which would make imports of goods from China to the west more expensive, and exports to China cheaper. Unfortunatley the benefits in trading conditions to the west would be very much offset by the slowdown in growth of the Chinese economy, and the increase in costs of goods

[Bangkok]

Thank you Didwot.  I was a little suprised at the lack of interest, as it will be one of the bigger economic issues of the near future.  I agree with your comments, and am slightly fearful of the great and the good getting this issue wrong!

[Didwot]

What is happening at the moment is that China is converting itself from an agricultural peasant economy to an industrial economy, and is achieving heady levels of growth. This acts as a stimulus to the world economy, and gives developed economies access to a cheap source of goods. On the other hand it is leading to escalating prices of basic commodities, eg steel, as China sucks in more and more supplies, and this leads to incresed costs elsewhere. Every silver lining has its cloud.