China calls the shots in Asia's currency war

“China’s currency has become an anchor for the region and we just hope the Chinese will not throw the anchor overboard and cut everyone loose,” said Neumann.

Relying on China not to pursue their own self interest is a long shot.

Were the international banking community responsible, yes I know, and there is no Santa Claus, monkeys fly out my butt, etc. etc., they would just trade the yuan, or whatever it's being called today, at it's true level. There is no sensible economic reason for China being allowed to peg its currency so low. There isn't much more that China can ring out of its export oriented economy at this point. Treat China's currency as it ought to be, and things would be looked upon differently.

Even if the article doesn't say a word about it, the real precipitant is the Japanese yen. Its "weakness" is pissing off American car manufacturers and Chinese electronics/white appliances alike. Just where is the "happy medium?"

Sure, you could argue that Japan is just recouping a decade of patience and tolerance as the Chinese economy grew and then outpaced it. But, is the risk of a regional all-out currency devaluation war favorable to anyone? Someone has to take the high road... Yet, waiting for the first country to blink is like Russian Roulette - losers die...

@ Nichikolohe

Except that this is Russian roulette in reverse. Countries are competing on whom can trash their own currencies the most. The winner of this competition dies first. The others follow.

china have huge population with income well below average living standard.which majority of investtor ignore. the wealthy population seen recently is a small percentage of the total population. with total wealth they have may not be able to sustain a serious downturn. even the china government reserve is not enough to sustain growth. therefore it is conceivable in china government self interest to do what ever they can to feed the majority poor underclass.