Ever wonder why Asian countries rarely complain, in the same spirit as does the West, about the “unfair advantage” China gets from a weak yuan? After all, they have a lot to lose too from a subdued Chinese currency – on the one hand, they compete with China for global exports, and on the other, many of China’s neighbours count the country as their single largest trading partner.
One reason, perhaps, is that they don’t have as much influence as the US or European Union have against the Asian economic superpower. Another may be that many of them themselves intervene in the foreign-exchange markets at regular intervals, a fact that robs them of at least some moral high ground.
And then there could be a third reason: While Asian currencies outperform the yuan during the boom times, they actually underperform the Chinese currency during a bust. To that extent, the yuan may be emerging Asia’s very own “safe-haven” currency, rising in value against Asian peers during periods of market stress and weakening at other times – just like the dollar.
Here are some supporting figures: So far in May, the dollar has risen 1.5 percent against the yuan, meek when compared with the 5.2 percent increase for the ICE dollar index. But against other Asian currencies, the dollar has appreciated more – 2.4 percent versus the Taiwanese dollar, 3.5 percent versus the Philippine peso, 4 percent versus the Singapore dollar, 5.1 percent against the Malaysian ringgit, 7.1 percent against the Indian rupee, 7.2 percent versus the Australian dollar and 8.5 percent versus the New Zealand dollar.
The one exception to the rule is the Japanese yen, which has dropped 1.3 percent against the US dollar so far this month.
http://blogs.marketwatch.com/thetell/2012/05/31/why-doesn percentE2 percent80 percent99t-asia-complain-against-the-weak-yuan/