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China: Yuan Hits High Against Greenback; Apple (NASDAQ:AAPL) Maps Better Than Google (NASDAQ:GOOG) in the Mainland

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Meanwhile, foreign banks reported strong profits in China for 2011.

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MINYANVILLE ORIGINAL The yuan rose to its highest level in 19 years on Friday, touching 6.2835 per dollar, thanks to both quantitative easing by the Federal Reserve and a record injection of funds into the financial system by China's central bank.

"The yuan's recent rise, on first glance, comes as a surprise considering all of the doom and gloom surrounding the Chinese economy," Christopher Vecchio, currency analyst at DailyFX, told MarketWatch. "However, it's important to consider that the Fed's QE3 program creates excess liquidity - like its predecessors - that, in theory, should flow to the safest- , highest-yielding assets."

"With US Treasury yields low, investors are inherently forced to search elsewhere for return [and] despite the Chinese economy's recent weakness, we must respect the fact that it is the world's second-largest economy and still maintains a growth rate north of 7%" year on year, he said.

The yuan's rise is likely linked to an improvement in the performance of the Shanghai Composite Index, where investors are expecting the government to launch new stimulatory measures any minute.

"Funds are flowing back into the market as people bet China will soon act more aggressively to revive growth," Kenix Lai, a Hong Kong-based foreign-exchange analyst at Bank of East Asia, told Bloomberg. "There's always expectations that the government will announce important polices before or at the end of a long holiday. The stock market is also rallying on stimulus bets."

The timing of the yuan's rise against the greenback will likely ease concerns that currency manipulation by the Chinese will be a topic of contention at the upcoming US presidential debates.

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