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The big problem is that the Chinese currency is really nothing more then monopoly money. Here is the explanation why...
1 – Walmart pays USD to a bank in China.
2 – Bank reconcile the trade with China supplier and pays RMB to China supplier (i.e. printing more RMB).
3 – Net net, becoz Walmart cannot settles its trade in RMB (i.e. cannot own RMB outside of China), China ended up with an accumulation of USD on one hand and on the other keeps printing RMB, which doesn’t “flow” outside of the Chinese border.
So, in effect they have created this internal monopoly money that is really worthless.
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