Meanwhile, in Asia, the Japanese economy s sputtering indicators have spurred the Bank of Japan to increase its securities purchases, which likewise point to the prospect of a weaker yen. And unmistakable signs of slowing growth in China are leading investors to ask, for the first time in years, whether China s government will seek to engineer a weakening of the renminbi s dollar exchange rate.

CLAREMONT, CALIFORNIA China s current economic slowdown has no shortage of causes Europe s financial turmoil, sputtering recovery in the United States, and weak domestic investment growth, to name the most commonly cited factors. Since exports and investment account, respectively, for 30 and 40 of China s GDP growth, its economy is particularly vulnerable to weakening external demand and accumulation of non performing loans caused by excessive and wasteful spending on fixed assets.