Brad Setser Declares Chinese Yuan ’Incredibly Weak’ - Here’s Why It Matters

Currency expert Brad Setser drops bombshell assessment on yuan's fragility.

The Verdict

Setser's analysis cuts through the usual central bank spin—calling the Chinese yuan "incredibly weak" isn't just opinion, it's a professional diagnosis from one of forex's sharpest minds. The currency's bleeding value against major counterparts, and Beijing's usual tricks aren't working.

Market Realities

Capital flight accelerates while monetary policy tools sit gathering dust. The PBOC's attempts to prop up the currency look increasingly desperate—like trying to bail out a sinking ship with a teacup. Meanwhile, dollar dominance keeps crushing emerging market dreams.

Global Implications

When the world's second-largest economy can't stabilize its currency, everyone feels the tremors. Trade wars intensify, commodity markets gyrate, and suddenly that "safe" emerging market investment looks riskier than a leverage-heavy crypto portfolio.

Finance's open secret? Central bankers pretend currency manipulation's complicated—really it's just printing money and hoping nobody notices the inflation. The yuan's weakness exposes the emperor has no clothes, and the entire fiat system's looking pretty naked these days.

Chinese Yuan Will Only Depreciate, Not Appreciate

Setser explained that the Chinese yuan will only depreciate in the coming years, but barely appreciate. While China is mobilizing developing countries to shun the US dollar, not everybody is on board. Countries like India and South Africa are staying away from using the local currency. Only countries like Russia and Iran are pushing the yuan forward as they’re economies are sanctioned by the WHITE House.

The Xi Jinping administration is only leveraging the angst against the US dollar to its benefit. China is doing little to nothing to make the Chinese yuan a reliable currency to trade with. The trade deals seem forced and one-sided, where China is disbursing loans in the yuan. If the other side rejects the yuan, China automatically stops financing them. It is no longer a two-way street, and the Jinping administration is forcefully pushing its way.