| Rise of RMB, bad or good? | |
|---|---|
| Feb 6, 2007 20:56 |   |
 | A report from Chinadaily warned that a drastic revaluation of the yuan may suit the interests of international speculators but could trigger a financial crisis in China. And RMB is expected to appreciate by 5-6 percent this year! |
| Feb 6, 2007 20:57 | #1 |
| So, is it bad or good for RMB's continued appreciation in your opinion? |
| Feb 7, 2007 01:11 | #2 |
| Two faces:-) Haha!!! |
| Feb 7, 2007 01:50 | #3 |
| I'm working for a multinational and most of our managers from US are choosing RMB as their salary money now. The company intended to pay them by dollars as in the past, but they refused. |
| Feb 8, 2007 08:11 | #4 |
| Yes, The RMB is undervalued. The 5 or 6 % rise May mentions is but a small proportion of what it 'should be'. So the foreign workers getting paid in RMB will not benefit all that much. The USA wants a big revaluation because the current rate is 'unfair'. China is gaining an export advantage and an import disadvantage. And for the USA and other countries, the opposite is true. The result is that China has big trade surpluses....great for covering potential tougher times ahead, great for stopping too much importing before China has had a chance to develop its industries to compete in the long term. On the other hand it is stopping people having quite so much wealth now.... but that's not really any different from saving money from what we earn....and many Chinese are choosing to do just that as they are also concerned to save for a possibly tougher future. If the USA is upset because of the 'unfair' advantage of an undervalued RMB...tough sh.t! They have so many illegal trade practices (eg subsidies, import restrictions, foreign investment restrictions) they don't have a moral leg to stand on! The land of the market econonmy? Only when it suits them. |
| Feb 8, 2007 19:09 | #5 |
| Well said, Paul! Applause~ |
| Feb 17, 2007 21:35 | #6 |
| USA know they have a good thing when the world esp Asian contires reserves are held in US currency. If the Asian countries were to sell their US$ reserves the world would go bust. This allows the US to spend every penny they have and no one can do anything about it. |
| Feb 24, 2007 09:59 | #7 |
| Teknomed, I see it a bit differently - it allows them US to spend far more than they have!!!! Countries can choose to hold other currencies....the Euro represeents a more powerful trading bloc than the US. If the businesses and governments stop holding the US debt, the US is in trouble. At the moment we all think the US isleading the world, the reality China already is simply because of its massive buying power and export of cheap products. Australia is an economic province of China, our stockmarket should respond to what is happening in China, not the decaying USA, but the 'old school' hasn't worked this out yet. If China's economy stalls, Australia will experience a depression...and the rest of the world will have some level of recession too. |
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