The renminbi has risen 10% in trade-weighted terms since the middle of last year, reaching its strongest level in over five years this week. The last time we witnessed such rapid gains, they culminated in an abrupt reversal in the summer of 2015. While the current backdrop is not identical, there are some important similarities including a construction downturn, an unsustainable rise in the trade surplus and a divergent policy outlook compared to the US.
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