Whether you are already invested in China, thinking of investing in China, competing with China or just wondering if you'll have a job in six months, the possibility of an economic meltdown in China should probably be on your radar screen. The $164,000 question is: Just how real is the possibility of a crisis in China?
The irony is that while some predict crisis in China sparked by a banking collapse that would surely lead to a devaluation of the currency as incoming investment dries up and domestic savings flees in search of security, others are calling for a revaluation of the currency to restrain China's overzealous export growth that is supposedly wreaking such havoc in labor markets overseas. With so much noise centered on the possibility of both a Chinese currency revaluation and devaluation, could it be that the likely outcome is in the middle? That's what I'm betting on. Let's look at the pros and cons.