By Chris Berry (@cberry1)

For a PDF version of this note, please click here.

Question: What is China’s #1 export?

Answer: Deflation

The correct answer to the question above is electronic equipment ($571 billion USD worth according to the CIA Factbook), however the PBOC yesterday made a compelling case for replacing electronic equipment with deflation as banking officials in the country devalued the Chinese Renminbi (RMB) by almost 2%.