“I think it is highly likely that China will devalue the yuan next year, risking a trade war,” Edwards added.
China’s foreign reserves, which is the world’s largest at $3.2 trillion, has been steadily falling over the past three months as “hot money” is pulled from the economy.
“The reality is that China’s economy today requires significantly more financing to achieve the same level of growth as in the past,” Chinese analyst Charlene Chu said.
- iShares FTSE/Xinhua China 25 Index Fund (NYSEarca: FXI): down 18.9% year-to-date
- SPDR S&P China ETF (NYSEArca: GXC): down 18.8% year-to-date
- Guggenheim China Real Estate (NYSEArca: TAO): down 27.9% year-to-date
iShares FTSE/Xinhua China 25 Index Fund
For more information on China, visit our China category.
Max Chen contributed to this article.