The yuan's turning point -- and the dollar's

When will China's currency finally and decisively part ways with the dollar?

DR Australia editor Dan Denning's voluminous reading as of late includes an online book called "The Turning Point in China's Economic Development."  One of its key premises:

"China has or is fast approaching reached the turning point in its
economic development, at which 'surplus' labour from agricultural
employment in the countryside ceases to be available to drive the
growth of the modern economy; so that labour becomes scarce and
valuable; forcing large real wage increases and real exchange rate
appreciation; which generate structural change towards more
capital-intensive and technologically sophisticated industrial
structure at the relative expense of labour-intensive manufacturing
and agriculture; and changes fundamentally the character of China's
interaction with the international economy."

It's a turning point indeed when labor becomes scarce in China — when, in a sense, 1.3 billion Chinese aren't enough to keep the engine going without wage increases.

But as the authors hint at, it also spells a turning point in the yuan-dollar relationship.  Dan makes the point less subly: "In other words, it identifies the natural economic point at which it makes sense for Beijing to allow the currency to appreciate.  This is all sorts of bad news for the dollar. You're really talking a major body blow, maybe even the coup de grace for the greenback, with this kind of structural revaluation of China's currency.