I think there are some errors in your original post.
Chinese government sets the exchange rate by setting the exchange rate against the dollar, while the rest of the world operated on a currency market. At a time when the rest of the export nations (Germany, Japan etc) are losing export due to higher evaluation of their currencies, China is expanding its export market share.
According to this highly recommended blog http://mpettis.com/, this trend will lead to trade tension and quite possibly trade war.
A readjustment is in order. U.S. has to import less and export more (we’ve started doing that), and China needs to consume more and export less. However, China is still spending to stimulate export growth against internal consumption.
By the way, you think our real estate bubble was bad. Wait until the Chinese one pops. Go onto the website above to look for stories on an overripe Chinese real estate bubble.
