China's Impending Financial Crisis

At Seeking Alpha, Tom Malthus writes:

Sitting here in Hong Kong, I know few people who aren’t transferring money into China to take advantage of the appreciating RMB and attractive domestic rates. In fact, a study conducted by the Chinese Academy of Social Sciences estimates there is around USD1.75trn of such money within China, with USD150bn coming during the first five months of 2008.

The good news for these investors is that the RMB is still expected to appreciate over the next 1 to 2 years as the Chinese government continues to correct economic imbalances. However, there is bad news. Eventually, the RMB appreciation will peak, and those investors solely within the country to take advantage of the appreciating currency will begin to pull back. This will likely cause liquidity problems within the Chinese economy, and will lead to further depreciation as more investors attempt to withdraw their funds.

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http://seekingalpha.com/article/84742-china-s-impending-financial-crisis?source=d_email#comment_form