China, old and new

Ok, so here's a response to the recent request for me to update my predictions.

In my 2009 prediction I warned of an implosion of the Chinese bubble. I know it's next year already, but hey...

Back then I warned that "Initially, there'll be firesale attempts at prolonging the implosion." What I didn't think about was the timing of the long-awaited Renminbi de-float.

So much for old predictions, roll in the new:

1. We now know that in March China ran a trade deficit for the first time in six years. If (and only if) there are three more months of this, then China will weaken the Renminbi. The weakening may happen before the deficit reportage, as the Chinese may act on the basis of forecasts.
2. If this happens, it will be credited to the diplomatic savvy of Geithner and Obama, rather than Chinese competitiveness.