The number of foreign-invested research and development centers in China has risen from about 700 in 2004 to more than 1,200 this year. This is a clear indicator that China is transforming from a low-cost manufacturer into a center of innovation, says emerging markets expert Irwin Greenstein. However, investors need to treat the country’s foreign direct investment numbers. Statistics for China do not meet international standards…

The liquidity crisis that began with the collapse of Bear Stearns and has led to the fall of Lehmen Brothers (NYSE:LEH) is spreading. This has prompted foreign central banks to bolster liquidity in domestic markets, reports Jason Simpkins. Even the Bank of China decided to cut its benchmark lending rate. It is its first rate cut in six years.

Russell McDougal at Investor’s Daily Edge says there is too much dollar-based debt that can’t be paid back for the buck to survive in its present form. Another Nixonian dollar default is coming, this time via hyperinflation. And the same people who have sentenced the greenback to death will be launching its replacement, the Amero.

The Chinese economy is showing signs of a slowdown, says Jason Simpkins in Money Morning. And despite the hype of the Olympic games, the Shanghai Stock Exchange is tumbling. Given the size of the economy, China needs to grow at over 8% annually to create enough jobs. This means a rumored $58-billion government-sponsored stimulus package looks more and more likely…

Most people know the largest economy and most widely held currency in the world are in trouble, says spy-turned-newsletter-editor Fitzroy McLean.

As Byron King said recently in Penny Sleuth, the Bush administration has presided over a massive expansion of government’s role in finance – a new era of bailouts.

These bailouts will have a disastrous long-term effect on the dollar. Fitzroy recommends two currency plays to best protect your portfolio from the buck’s ultimate devaluation…

Visit the port of Hong Kong for the first time this summer, and you won’t know that anything is amiss. It’s a hive of activity, full of ships loading up on containers stuffed with Chinese goods for export around the world.

Editor’s Note: The dollar has been sent to the woodshed following the Fed’s dovish decision yesterday to hold rates steady, says forex expert Chuck Butler in The Daily Reckoning. Don’t expect it to leave anytime soon…

Aussie dollar pumping iron… Icelandic krona dumps… Brazilian real top of the class… China puts brakes on renminbi…

More losses… Currencies rebound… Jumping off the bandwagon…  Slowing renminbi appreciation? And Now… Today’s Pfennig!

China’s long-term prospects are so strong that even a civil war, an economic collapse or political assassinations would only temporarily delay its emergence as a worldwide economic powerhouse.