China Headlines:
China GDP to Grow 8.7% in 2011, Down From 10%, World Bank Says

That’s a material drop that could take away some of the bid for commodities.

PBOC’s Yi Says China Will Remain Long-Term Investor in Europe

Yes, along with Japan now

And an obvious Trojan horse, as they are doing this to support their export industries

Geithner Says China Must Boost ‘Undervalued’ Yuan

The yuan has climbed about 3 percent against the dollar since officials
in June scrapped a peg which had been in place since the global
financial crisis.

“This is a pace of about 6 percent a year in nominal
terms, but significantly faster in real terms because inflation
in China is much higher than in the United States,” Geithner
said. Taking inflation into account, the yuan is rising at a
rate of about 10 percent a year, “so if that appreciation was
sustained over time, it would make a very substantial
difference,” he said in response to a question after the
speech.

Reads to me like he has that backwards?
Doesn’t higher inflation bring the currency ‘in line’ without nominal revaluation?

China Says Stronger Yuan Won’t Solve U.S. Trade Gap
China to Let Companies Invest Overseas Using Yuan

Interesting!

China’s companies now need to sell yuan to the Bank of China to get fx to invest over seas.
This depletes China’s fx reserves which may or may not be an issue for them.

If instead China lets its companies spend yuan overseas directly that will put downward pressure on the yuan via the rest of world satisfying its yuan ‘saving desires’ directly.

Currently, the rest of world satisfies its yuan ‘saving desires’ by selling dollars, euro, etc. to the Bank of China via the Bank of China’s currency intervention operations that keep the yuan weaker than otherwise.

So this could be a back door way for China to keep the yuan weaker than otherwise without as much currency intervention?

And note that they again use ‘Fed money printing’ as cover.