Since 2008, in response to the financial crisis, the Chinese renminbi (RMB) has been pegged at about 6.82 to the US dollar. On the evening of Saturday, June 19th, the Chinese government announced a return to pre-crisis monetary policies which allowed for greater flexibility in the value of the RMB against the dollar. Monday morning saw proponents of immediate revaluation wishing for a little less conversation and a little more action as the Chinese government left Monday morning exchange rates unchanged from Friday’s value of RMB6.8275. China will now determine its exchange rate with reference to a basket of currencies, but the authorities have not given any hints as to what the new currency regime will be.

While the RMB initially surged in forwards markets as traders anticipated future appreciation (as much as 3% in the coming year), the currency actually inched downward on Tuesday, followed by a tiny uptick on Wednesday morning. Three days into the unpegged system and it is clear that aside from the yuan’s daily dance, Beijing is primarily interested in keeping its currency valuations relatively stable and that investors’ hopes for a one-way upward appreciation were wishful thinking.

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In 2009, investment guru Jim Rogers quipped, “If you were smart in 1807 you moved to London, if you were smart in 1907 you moved to New York City, and if you are smart in 2007 you move to Asia.” Asia’s fertile investment potential tends to attract the entrepreneurial, motivated, risk-taking and driven sort – and Mr. Rogers was no exception. Wanting to be in the thick of the economic action, Mr. Rogers decided it was time to find a new neighborhood. He sold his $16M NYC mansion and moved to Singapore in 2007.

He wasn’t the only one. The strength of the Asian economies (not to mention generous expat packages) turned the heads of many New York associates toward Asia. The prospect of working with emerging superpowers like China on one transaction, while breaking ground in a true emerging market like Cambodia on another made my New York deal sheet look like a sensible black dress at Bryan Park’s fashion week. Go east, girlfriend, and grow up with a new country!

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