``They are making the currency convertible in three stages. The first is to make the RMB a global trade settlement currency; the second an international investment/debt currency; and the third an international reserve currency. We are currently well underway on the first two steps on the 3 step plan... There is increasing consensus that China can absorb a large currency revaluation. First, there is still a direct labor shortage on the east coast. Secondly, despite large wage and manufacturing costs in China recently, domestic demand is more than making up for lost exports in textiles and other manufactures.''

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