> So while you sold RMB someone else must have bought it.
And who is selling USD to buy RMB these days (besides the export companies that have to)? Definitely not my Chinese colleagues, nor my foreign colleagues. The direction is basically one way at the moment. How long can that be sustained? Do you want to change some of your USD to buy a house in Shanghai?
> Meanwhile the Chinese economy runs on the RMB. Has the amount of RMB in circulation been dwindling?
I assume not, they are probably just printing a bit more ATM. And the vast majority of the Chinese people don't have dollar assets...its just the middle/upper class we are talking about. Their share of the economy is huge, however.
> Likely but they swapped the holdings for other assets such as real estate.
Yep. That real estate isn't in China, and isn't contributing to the Chinese economy.
And who is selling USD to buy RMB these days (besides the export companies that have to)? Definitely not my Chinese colleagues, nor my foreign colleagues. The direction is basically one way at the moment. How long can that be sustained? Do you want to change some of your USD to buy a house in Shanghai?
> Meanwhile the Chinese economy runs on the RMB. Has the amount of RMB in circulation been dwindling?
I assume not, they are probably just printing a bit more ATM. And the vast majority of the Chinese people don't have dollar assets...its just the middle/upper class we are talking about. Their share of the economy is huge, however.
> Likely but they swapped the holdings for other assets such as real estate.
Yep. That real estate isn't in China, and isn't contributing to the Chinese economy.