First let me thank Com. Ulhas for posting these articles. I am thinking of getting a subscription to the Hindustan Times myself.
In general I think derivatives trading is a good idea, but I think the Chinese may have problems here. Traders at American and European banks will inevitably try to use derivatives to take advantage of the perceived undervaluation of the Chinese currency. Everything will go fine in the beginning because most derivatives are well-understood. However, once Chinese banks get past the plain-vanilla interest rate swaps, etc., they are going to get into contracts that will be difficult to unwind. It's always the unwinding that kills the derivatives trader. Watch for well-connected Chinese developing creative ways to pile money outside the country.