China

China holds dollar reserves and settles trade in USD. Every time the Fed expands M2, that premium compounds against the CNY, on top of domestic inflation.

CPI: World Bank (FP.CPI.TOTL.ZG). US M2: Federal Reserve FRED (M2SL). Reserve premium = cumulative M2 growth − cumulative US CPI.

China runs the second largest economy on earth, but it does something no other major economy does at scale: it actively manages its currency against the dollar within a daily trading band set by the People's Bank of China. That's not a free market signal — it's a policy decision. For investors trying to compare returns on Shanghai-listed equities versus S&P 500 holdings, this matters enormously because the exchange rate you see today reflects political priorities as much as economic reality.

The yuan has depreciated in meaningful bursts that caught foreign capital off guard. In August 2015, Beijing surprised markets with a sudden 2% devaluation that cascaded into weeks of volatility and accelerated capital outflows. By early 2017, the yuan had lost roughly 13% against the dollar from its 2013 highs. Then it recovered, appreciating back through 2018 before the US-China trade war reopened the pressure valve. These aren't gentle drifts — they're managed moves with real consequences for anyone holding cross-border positions.

Domestic inflation in China averaged around 2-3% annually through much of the 2010s, which sounds benign. But combine even moderate CNY inflation with periods of dollar strength and managed depreciation, and a Beijing property investor or a fund with onshore RMB exposure can find their dollar-equivalent returns significantly compressed. The renminbi internationalisation push — expanding yuan use in trade settlement and SWIFT transactions — adds another layer of complexity: a more global yuan is also a more volatile one.

The real question for any investor or analyst isn't what the CNY/USD rate is today. It's what a dollar invested in China was actually worth in purchasing power terms five or ten years later, accounting for both countries' inflation and the exchange rate path between them. That's the number this calculator shows you.