In the recent 6 to 12 months, it has been a great controversy on the appreciation of the Chinese RMB. Though many countries are still in the recovery of the financial tsunami, China has experienced economical growth which is much higher than the market expected. In 2010, in view of the overheating economy of China, many people expect an appreciation of the Chinese currency RMB.

How well was China doing in 2009? By taking a look at China’s GDP in 2009, you will know that it out-performed many other leading countries in the world. It maintained 8.7 percent GDP in 2009 which was exceptionally high compared to many countries because quite a lot of them are under the recovery of the financial tsunami in 2008. The high GDP was resulted because China was not much affected by the financial tsunami (sub-prime loan) in 2008 and the high internal demand and investments.

In 2010, many analysts or economists expect China’s GDP to reach a higher point because of the significant growth rate in export. It is well known that China has a significant export for years, but actually, the export did not impose any positive impact on the GDP. But in 2010, the further increase (25 percent) in export may impose a positive impact on GDP. This will be an additional impact to its high internal demand and investments and results in a higher GDP in the year 2010.

In the view of international financial market, the pressure for appreciation of RMB is also high. Owing to the high unemployment rate and slow economic recovery in the United States and other European countries, the request of appreciation of RMB is increasing in recent 6 months.

China is emerging among all the international countries and is playing a more important role compared to 5 years ago. But, to be further recognized by the world’s giants, the Chinese Government has to seriously treat the currency issue. Actually, other than the pressures from the world’s giants, there is another reason for the appreciation of RMB, which is the flow of hot money. As many investors are in the view that RMB is going to appreciate, hot money flows to China preparing to reap a sum over the appreciation.

Though RMB is likely to appreciate in a short period of time, the rate of appreciation is unpredictable. The most aggressive opinions on appreciation of RMB were discussed in the World Economic Forum. On the whole, most financial experts estimate the appreciation will be around 5%.

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