China Falls Victim to Greek Deficit Contagion: Michael Pettis

China is under growing pressure from Asia, Europe and the U.S. to revalue its currency. Until recently, it even looked like we were about to embark on a sustained process of yuan revaluation fairly soon.

The Greek crisis may have changed that. The 15 percent slide in the euro’s value against the yuan over the past six months has eroded Chinese competitiveness in the market of its largest trading partner: the European Union. More importantly, many trade-deficit countries in Europe -- such as Greece, Portugal and Spain -- are having difficulty financing themselves. Without net capital inflows, these countries can no longer run current-account shortfalls.

ολοκληρο: http://www.bloomberg.com/apps/news?pid=20601039&sid=aZ0pPHyl_3tQ

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