One project is a 197-km (122-mile) rail link between northeastern Liaoning province and northern Inner Mongolia, and the other involves an investment of 17.02 billion yuan ($2.6 billion) in a separate rail link between different cities in the two regions, the National Development and Reform Commission (NDRC) said on its website.
More currency devaluation expected
Most outside traders consider the yuan to be more than 10 percent overvalued against the U.S. dollar. Allowing the market to take the exchange rate to that value could potentially devastate China's domestic economy, but it's an expensive — and potentially impossible — task to fight the market now that the yuan is a global currency.
China’s decision to push the value of its currency lower has opened a new front of worry for global investors: a potential wave of currency devaluations among the so-called Asian tigers — South Korea, Singapore and Taiwan.
Such an outcome, a number of foreign exchange specialists say, would put a further damper on global growth expectations
“I expect these currencies to fall by another 20 or 30 percent,” said Raoul Pal, an independent financial analyst and the founder of Real Vision TV, a media venture where sophisticated investors discuss their views on the market. “These export figures are a big deal — it’s a huge shrinkage in the dollar-based economy, as not enough people are buying goods.”
For quite some time, Mr. Pal has been promoting an investment thesis that the relentless rise of the dollar — since mid-2011, the dollar is up 35 percent against a broad basket of currencies — will have a deflationary effect on the global economy as export-driven economies enter into a series of competitive devaluations to protect crucial export sectors.
“This is not just a commodity story,” he said. “It’s a global trade story.”
Exchange-rate volatility in this part of the world will not take the heat off other weak currencies. In addition to usual examples like Turkey, Brazil and South Africa, investors expect commodity exporters like Indonesia, Chile and Colombia to take a big hit, as the prices for their products continue to fall.
SOURCES - CNBC, Reuters, NY Times, Brookings Institute