Why does China matter to you?
If you own a house (and haven't already paid it off), China is very important to your financial future. How's that for bizarre? Allow me to explain:
In order to keep their exchange rate pegged to the dollar, it is necessary for the Chinese to buy dollars. These dollars are then invested in bonds. This keeps the demand for bonds high, which keeps the interest rate on bonds low.
With me so far?
Now here's the trick - if the Chinese were to decide to loosen their currency controls, they would stop buying bonds. The demand for dollars would fall, and the Chinese currency would rise. At the same time, the demand for bonds would fall and the interest rate would rise. Possibly dramatically.
And, if you don't have a fixed rate loan, the loan on your house would also experience a rise in interest rates. Having recently played with an interest rate calculator, I have seen how amazing the change in payments can be for a small interest rate change.
And there's no guarantee this would be a small change....