The yuan has gained just 3.6 percent against the dollar since its revaluation in July last year.
Another factor is the so-called "carry trade," which involves heavy yen-denominated borrowing, thanks to Japan's low 0.25 percent interest rate, for investments in higher-yielding countries like Thailand, where the benchmark interest rate is 5 percent.
"Investors just jumped on that as easy money on the table," says Jonathan Anderson, chief Asia economist for the UBS brokerage in Hong Kong.
The conditions made it "very easy and attractive to speculate on the currency, so you get a virtuous or vicious circle, depending on whether you're an investor or a policy maker," he says.
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