Chinese Currency Report Headed to Congress Soon

According to CNN, China's currency manipulation is the subject of a report being withheld from Congress "to provide more time to address China's alleged currency manipulation."

With China's currency remaining inflexibly pegged to the U.S. dollar, market forces that would ordinarily tend to change countries' buying power as their fiscal policy and financial security oscillate have been held in abeyance. Once one establishes the manipulation, one is free to debate whether this works against the U.S. in ensuring a terrible trade deficit and costing local jobs to seemingly-cheaper foreign production, or works in favor of the U.S. by having foreign workers' compensation artificially depressed in order to allow Americans to afford more of everything they want to buy (which is everything, because lots of the money crossing the border has been in the form of U.S. government bonds held now in China ... so those 30-year mortgages that are in effect subsidized by government guarantees are really available largely because Chinese laborers are being screwed in every paycheck to keep the exchange rate favoring dollar holders like the Chinese government at the expense of those – like the vast citizenry of China – who are being paid in renminbi that would be a lot more valuable if the Chinese currency traded freely against the U.S. dollar).

Since the Chinese currency is undervalued something like 40%, it looks like the return ride from 60% back to 100% calls for an appreciation of 66%. This is why I like investment ideas that turn on business opportunities involving Chinese-denominated assets or value streams. Among those I've bought (some of which I've not discussed much here) are China America Holdings (CAAH), China Logistics (CHLO), and China Armco (CNAM). In this market – the market for little Chinese stocks – it's critical to make sure you're buying not only a company whose numbers interest you but also a ticker that has enough volume to enter/exit without taking a beating. Once you leave the major exchanges, you can run into issues with bid/ask spreads and thin volume that make what you think you are reading in stock quotes completely useless.

Somewhere, someone must be doing serious work on picking good value opportunities that are also good plays on China's currency and the economic explosion of China in the 21st century. The combination play is too interesting to miss. Someone with an idea where to look for high-quality investment fodder to take advantage of this play, please post!