Heading for a currency war with China?

Very insightful chart on the performance of the Chinese currency, stock market, and GDP. The currency has been on an upward trend for years with a rest periodwhen it was fixed to the dollar during the post financial crisis timeframe. 

So how did that exchange policy work out for the Chinese markets and economy. GDP has started a slow down  trend. This slowdown has been expected given past hsitory of emerging markets. We have seen a decline in exports and a significant decline in the trade surplus. More interesting has been the significant decline in the stock market especially in the export driven companies. The clear inference for many policy makers is that RMB strengthening may have hurt the financial and real markets. This hypothesis is hard to untangle but has some truth. Now we are seeing a slight change in RMB direction. This does not just happen without the support of the government. More expansionary monetary policy and a desire to perhaps use the currency as a tool to help jump start the economy or at least keep it at current levels is the likely policy tilt. Financial and capital control liberalization will take a backseat in the short run.

A lower renminbi is the desired tilt of China. Isn't this what the Fed wants and the ECB, and the BOJ? Everybody cannot have what they want. Let the currency games begin.