China’s renminbi is in the ascendant, reports the Financial Times.

In July 005 the renminbi was re-valued at Rmb8.11/$1. Now it’s close to Rmb7/$1 and has gained some 4% against the dollar since the beginning of 2008.

Is this a sign of a change in policy by the Chinese towards their currency?

Not entirely, according to the FT.

Measured against nearly any other currency you care to mention, renminbi performance looks feeble. So far this year it has depreciated by 3 per cent against the euro, the currency of China’s biggest trading partner, and 4.4 per cent versus the yen. On a trade-weighted basis, it has gained a mere 0.5 per cent, according to JP Morgan. Of course, there may be further catch-up to come, particularly if reports in local media are to be believed. Forward markets certainly expect as much: non-deliverable forwards imply appreciation of 11.3 per cent against the dollar this year.

“China is growing up,” says Greg Guenthner in Whiskey and Gunpowder.

“And now that China’s economy is well into its adolescence, middle-class spending will continue to grow. And one small garment manufacturer is preparing to ride this ‘clothing boom’ all the way to the bank.”

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