a dog-eared town

always a communist. But at least they’re trying to go to a market economy. Whether they’ll get there is the question.

It seems China gave some guidance on the yuan revaluation and what the basket of currencies is. There’s no real information and there’s the communist “creed” in there too.

The central bank’s governor, Zhou Xiaochuan, also made good on a promise to disclose some details of the basket of currencies to which the bank refers in managing the float of the yuan now that it is no longer joined at the hip with the dollar.

“The currencies in the basket depend on the amount of foreign trade we conduct. The U.S., euro zone, Japan and South Korea are our biggest trading partners now,” Zhou said in Shanghai. “Hence, their currencies are naturally the main ones in the basket.”

So, they sort of give some information, but not too much as they don’t really want to do that. But some enterprising stategist has given a decent guess at what he thinks the basket really contains.

James Malcolm, a currency strategist with Deutsche Bank in Singapore, deduced that the dollar had a 30 percent weighting in the basket, the yen and euro 20 percent each, and the South Korean won 10 percent.

Based on that basket, Malcolm said the yuan had surrendered about 1 percent of its value in trade-weighted terms since it was revalued on July 21 by 2.1 percent to 8.11 per dollar. The currency was trading on Wednesday around 8.1065 per dollar.

Sounds about right. Can’t really argue against him there.

Of course though, there is the creed. It’s not really just a communist creed, it’s any totalitarian creed really.

The central bank twinned the greater trading freedoms with a warning that it would keep a firm grip on the currency market.

It said it had authorized the State Administration for Foreign Exchange, the currency regulator, to punish severely anyone who violated regulations or provoked disorderly trading.

The admonition was in keeping with the principle guiding China’s currency reforms: greater flexibility must not destabilize China’s markets or its strong economic growth, which helps underpin the Communist Party’s grip on power.

That’s right folks, don’t forget. Anything and everything that is done by mainland China is all about further the control of the communist party. Just be aware of that, but happy hunting.