Despite China's yuan hitting its highest level this year against the U.S. dollar Monday, the country's fundamental problems are "just gargantuan", Stewart Paterson, portfolio manager at Tiburon Partners, told CNBC.
"They (the Chinese) have deflation, they have a slowing economy," said Paterson, "To say there is no downward pressure on the RMB (Renminbi) or no fundamental reason for it to weaken, I think is very disingenuous and symptomatic of the fact that the Chinese population themselves are starting to lose confidence in their own currency."
The Chinese authorities are bolstering the yuan, in part, by selling off chunks of their foreign currency reserves and dumping dollars in the market. Nonetheless, the money stock in China is growing about twice the pace of its economy, at about 14 percent year-on-year.