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Chinese yuan breaks 7.5 mark against USD
Oct 25, 2007 04:41
  • ZOEY
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China's official news agency Xinhua News Agency reported on Oct. 24th that China's Renminbi (RMB) broke the 7.5 mark to reach a new central parity rate of 7.4938 yuan to one U.S.

The yuan, climbing 72 basis points to one dollar from Tuesday, rose a total 3,149 basis points from 7.8087 yuan on the last trading day of 2006.

Tan Yaling, an expert with the Bank Of China, said a weakening dollar and calls from the United States and the Europe that China should allow the currency to appreciate more quickly were "short-term reasons" contributing to the recent rise in value.

Speculation ignited by rising expectations of a stronger yuan also led to the continuous appreciation of the Chinese currency," she said.

The recent appreciation of Chinese currency had little impact on China's domestic market. The roaring price of goods worries the domestic consumers.

The fast appreciation of Chinese yuan is good or bad for China's economy? What do you think?

Oct 25, 2007 09:40
#1  
  • APAULT
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The rising yaun means that imports can be bought more easily and exports are harder to sell as they become more expensive. However, that doesn't really matter at this point because China has a massive price advantage over most of our major trading partners and will still sell cheaper than they can buy elsewhere or manufacture themsleves.

In fact the economy is growing too fast and the governement is trying to cool it. The rising yuan will support that effort. (Why an economy growing fast is an issue, is not part of the scope of this thread).
Oct 25, 2007 23:23
#2  
  • ICEBERG
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I really can not understand that why EU and US require China to appreciate its RMB as quickly as possible. China has its own right to make decision in accordance with its economic situation.
Oct 26, 2007 12:04
#3  
  • APAULT
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The government controls the rate of exchange at maintains it at a level which assists manufacturers. Exports are easier to sell and imports are reduced as they are more expensive. Therefore, it is against the rules of international free trade which if implemented should benefit everyone. But as Europe and the USA have MASSIVE intreventionist practices in place, China can reasonably say 'get stuffed'.
Oct 30, 2007 03:14
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  • JIMMYB
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Paul, it sounds that you are an economist, hehe. China has "got stuffed". US should not have blamed China on its exchange rate policy. Stephen Roach, chief economist with Morgan Stanley analyzed that the root of US's trade deficit is that US domestic savings in short, which only took 1.5 of the national income. China is not the scapegoat.
Nov 11, 2007 19:01
#5  
GUEST58294 It's not good for Chinese Ecnomy because too fast appreciation of Chinese Yuan will cause import more than export. Furthermore, Chinese domestic market will be impacted.
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