text: how would a change in the way chinese currency is valued against usd affect the performance of chinese stocks?   yes, and it is doing so at the moment. in july 2005, the chinese government relaxed trading controls on the chinese yuan, prior to this us$1= y8.25, now today us$1=y8.04 (a net decrease of 2½%).   as a result of this the main chinese stock exchange (the shanghai composite) has rallied from 1,060 to 1,250 (17.9%) compared to the dow jones industrial average (which has increased from 10,390 to 11,021 in the same time frame (+6.1%)). so it would appear that the loosing of controls on the yuan has benefited chinese stocks, but that those gains are tempered by the lack of performance in the us