With fixed exchange regime, China is piling up hoard of US dollar. To hold this money, China should bear inflation rate in inland. This is like a test of balloon. US is trying to pump air in China until it pops up. However, China has inner problem, such as Hukou which would be another big factor to blow up, this might be strengthens by inflation, which lead inequality in society.
With high CPI what is going to be a next solution for China? Interest rate increase? This is about to end. Many regulation? on housing. Money that used to flow into housing market, now flows into unregulated market such as parking lot.
Next. appreciate Yuan? this may cause in jobless in government owned companies. which will be very critical for Chinese Society.
From Economic point of view, China looks same with western countries in many aspects. However, China has too many people to feed up. and China knows its history. The country that holds more that 1 billion people always demolished by people. The time is coming.
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