If China Real Estate = Forced Savings ... "Danger, Will Robinson!"

In case you weren't aware of it, China's currency, by virtue of its soft "peg" to the US dollar, is very strong relative to the rest of its Asian competitors, as you can see in the various weekly charts below:  

The weakness in the Japanese yen is leading the way of course. The question is:  Is this a bad thing for China? 

If we assume China is still beholden to the export-cum-investment model, this is likely a "bad" thing.  But, if we assume China is and must make that transition we and others have talked about for years-to a more balanced economy whereby households gain a greater share of Chinese wealth relative to targeted industries and sectors-then this relative strength in the yuan is a "good" thing.  Why?

Currency Currents 22 May 2013