Many people don’t understand the corner China is painted into by the fixed exchange rate.
In order to buy all dollars that are presented to the central bank for exchange, they have to come up with huge amounts of Chinese money. The only way to get it is to print it. So when we create money over here, the inflation produced shows up in China.
Yeah, but it is their choice and it's biting them in the rear. The inflation is causing prices and wages to rise so quickly that their vaunted trade surplus is being whittled away as they lose their advantage and as imported goods look more and more attractive to the Chinese consumer.