China's policymakers must deal with the triple challenges of the unfolding European debt crisis, slow recovery in the United States and a secular growth slowdown in China's economy.
If China's only responds to the economic slowdown with big investment projects and huge capital injections, then it will be quenching a thirst by drinking poison.
The euro zone crisis and the transition of China’s domestic economy away from overreliance on infrastructure spending will continue to push the yuan lower.