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Economy

Don't write off the yuan

In the late 1990s, the consensus inside and outside China was that the Chinese yuan would collapse. I do not know of a China expert who did not write articles to that effect. Economists at investment banks routinely rolled over their forecasts for yuan depreciation on a monthly and quarterly basis.

     I was a lonely and noisy contrarian in those years, first as head of China research at HSBC Securities and then in a comparable post at UBS, insisting in published articles and interviews that the currency was more likely to appreciate than to decline. Today, the world has reached a similar consensus about the likelihood of yuan depreciation. But I feel that the "China watching" industry may be making the same mistake.

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