Yuan no longer a one-way bet

[HONG KONG] ONE of the surest bets on China is starting to look a bit shaky. For the past nine years, each business day at 9 in the morning, government workers in the blandly named Building No 30 in Shanghai's Pudong district have published a benchmark number that tells the world what their country's currency will be worth that day, when compared with the US dollar.

More often than not, the staff of the China Foreign Exchange Trade System has assigned a value to the currency, the renminbi, slightly stronger than it had finished the previous day. Thanks to the guiding hand of the Chinese state, the renminbi today is about 25 per cent stronger than it was in July 2005, when China scrapped the currency's fixed peg to the US dollar in favour of a steady, crawling appreciation.

But recent developments suggest such strengthening is no longer the certainty it once appeared to be, and Beijing is taking pains to show that China's currency is not just a one-way bet. This year, the renminbi has reversed course, weakening 1.6 per cent against the US dollar. And on Saturday, the central bank, the People's Bank of China, said that beginning Monday, it would allow the currency to climb or fall as much as 2 per cent per day against the US dollar, compared with one per cent previously.