Speculative capital flowing into China is a big concern: Principal Global Investors

Chandgothia Binay, Chief Investment Officer, Principal Global Investors (Asia) in a chat with ET Now talks about the Chinese economy.

The skyline behind you is indicating a lot of pollution from nearby China, which means China must have generated that trade surplus that Cathy Yang talked about and that must means some pressure on the Chinese to revalue the Yuan. You are smiling through all this, so what’s your view?

Yes, there was a small trade surplus but if you look at the Chinese context, the billion dollars in there do not really make too much of difference but yes, from a longer term perspective, it does mean that China will look more closely at the revaluation aspect and they need to do something about it given the fact that inflation is not exactly kind of where they would have liked it to be and you have the Chinese currency, which has been rock solid against the US dollar over the last 18 months, so there are indications that they will move in that.

They are probably waiting for the right time to move on that, so that there is not a lot of speculative capital flowing into China, which is to my mind the biggest concern that they face.