oh u once again proved that u have no idea of economics. your own statement (bolded) proves that in that scenario China will become the greatest consumer market because of deflation ie appreciation of Yuan. and that will result in NO BODY buying from China anymore because its products will be prohibitively costly! so all your NIKE, iPHONE, Samsung and REEBOK factories will close overnight on one side resulting in mass-unemployment, while ur exports will drop to zero, thus resulting in your foreign exchange balance dropping to negative. and the GREAT chinese economy will COLLAPSE!!!
If the USA were to repay all its debt (e.g US$1 Trillion) to China , and assuming SAFE (the institution, not adjective) adds the same amount to its global reserves , China will hold about $5 Trillion . The pressure for the CNY to appreciate will be overwhelming , and is likely to indeed appreciate .
The China consumer will find that everything is suddenly cheaper for him/her to buy...and buy they will.
Already right now, even at the undervalued CNY level, China is the largest consumer market for so many products . One can of course dis-regard the China Govt stats as propoganda , but what about those of Fortune 500 ?
In the end, the Chinese workers in China factories will be producing the goods & services for domestic comsumption. The domestic market is already huge , they no longer need to export (so much) of it.
BMW China sales surge by Booming demand from China.
China has become the German automaker's biggest market for the BMW 7, 5 and X6 Series as well as the BMW 5 Series GT., and they are all made in China by Brilliance Automative
BMW Expects ‘Significant’ Sales Gain, Led by China - Businessweek
BMW China sales hit record high in 2010
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Pradas China sales jumped a whopping 51 percent in the first nine months of 2010 and the luxury label is the ninth most desired brand in China according to recent research of management consulting firm Bain.
With 15 stores in China, Prada plans to open 30 more by the end of 2012 and launch a design studio in Hong Kong this year. China is Pradas biggest and most important market in the world.
Prada stages 1st runway show in Beijing, to open 30 stores by the end of 2012 | Retail in Asia
Wal-Mart's Q4 profit surges 27% on international gains in China, ; U.S. sales still lag
Wal-Mart's Q4 profit surges 27% on international gains; U.S. sales still lag | RetailingToday.com