This maybe of interest, from www.dezshira.com ______________________________ Our Senior Partner, Chris Devonshire-Ellis, held talks last week with Mr Li Ruo Gu, the Vice-Governor of the People's Bank of China. The subject over re-valuing the RMB was debated, with strong denials over any possibility of movement from Mr. Li under the current circumstances. Comments in brief were as follows: âThe US has developed the US dollar to being the world's major currency and must take full responsibility for this, in both the benefits and the downsides. Regarding the US economy, we do not take the view that it's problems are not caused or related to the current position of the RMB. We take the view that America 's current problems are caused by a massively increased expenditure coupled with tax cuts, and we feel that this policy is incorrect. We see no reason why China should change it's policy over the position of the RMB to cater for unwise American spending. Regarding the trade deficit, part of the problem is also caused by American policies â they appear to be happy to buy from us, however unwilling to sell us products. Unless we can have better understanding and trade flow between our two countries it is likely the deficit will remain. China wants to buy US products but in many cases is forbidden from doing so, especially in IT sectors. The matter over the RMB position is quite simple high school economics. America is spending hundreds of billions on it's military, and it's schoolchildren can easily buy a pair of Nike sneakers costing USD250 a pair. Many of China 's farmers do not earn that in a month. The US needs to reign in it's expenditure to balance it's books instead of looking to China to help at our expense. China does not want to bear the cost of excessive US spending unless it is in our interest to do so, and right now we have no such interest. There has also been talk of shifting the unofficial peg from the dollar to a basket of currencies, however, if we were to do this the basket would contain 70% US dollar in any event and with the strengthening Euro we cannot see any advantages a shift would bring. We can categorically deny that we intend to re-position the RMB as has been mentioned in some media, they have to sell newspapers, we have to run China 's economy. China can support the Regional economies as we have been asked to do and did so at our expense during the Asian financial crisis, and a stable RMB is key to this. We continue to follow this aim.â