Domestic investors' confidence in redback counts more than foreigners'

The pace of internationalisation of the "redback", as the renminbi is known by some, hasn't just taken off, it has soared.

I am one of the people who, in a small way, have helped this soaring take-off. I have personal holdings of yuan denominated investments and I have done reasonably well.

I did not invest in them as any gesture of national loyalty. I did it purely for reasons for greed. I reckoned that Beijing would maintain a policy of strengthening the yuan against the US dollar and so it has proved. The interest rate return is also higher than on the US dollar or Hong Kong dollar.

But I am a fair weather friend of the yuan. Let the indications point to weakness or let there be any hint of exchange restrictions and I am out. I also believe that this pretty much describes the thinking about the yuan among all the investors on whom the recent yuan hoopla has depended.

Exporters to China are happy at present to accept yuan in payment not because they need it to pay for imports or otherwise regard it as a major currency of international trade, but because it offers a good prospect for speculating on a currency gain.

In other words, Beijing has encouraged foreigners to hold yuan by artificially pushing the currency up, which could prove an unsustainable stimulus, rather than by convincing them that the soundness of the central bank's monetary policies will support the yuan.