China Devaluing the Yuan

Annie

Diamond Member
Nov 22, 2003
50,848
4,827
1,790
This doesn't look good:

Chinese economy: 1930s beggar-thy-neighbour fears as China devalues - Telegraph


1930s beggar-thy-neighbour fears as China devalues

China has begun to devalue the yuan for the first time in over a decade, raising fears that it will set off a 1930s-style race to the bottom and tip the global economy into an even deeper slump.

The central bank has shifted the central peg of its dollar band twice this week in a calculated move that suggests Beijing aims to offset the precipitous slide in Chinese manufacturing by trying to gain further export share abroad.

The futures markets are pricing in a 6pc devaluation over the next year. "This is clearly a big shift in policy and we are now on alert," said Simon Derrick, currency chief at the Bank of New York Mellon.

The move follows a Politburo speech by President Hu Jintao warning that China is "losing competitive edge in the world market".

China has allowed a crawling 20pc revaluation over the past three years. Any reversal risks setting off conflict with the incoming team of President-Elect Barack Obama in Washington. Mr Obama called China a "currency manipulator" during the campaign, a term that carries penalties under US trade law.

Outgoing US Treasury Secretary Hank Paulson is viewed as a "friend of China". He called for a stronger yuan this week before embarking on a visit to Beijing, but the plea was couched in friendly terms. This soft-peddling may soon change.

Hans Redeker, currency head at BNP Paribas, said China's policy switch could set off a dangerous chain of events. "If they play this beggar-thy-neighbour game, it will cause a deflationary shock for the whole world," he said....
 
DEvaluing it!?! Holy shit!

Okay, let's get real here, shall we?

They're doing this because they're willing to keep their workers poor for the wellbeing of the Government of China.

We ought to imposed HUGE tariffs on Chinese goods to offset this DEvaluation of their currency.

I doubt we will, though.

The Dems have a long history of cozying up to the Chinese, so they're not likely to want to piss them off.

DEvaluing means still more imports coming in from China and still MORE jobs (read investment from our industrialists) leaving America to take advantage of that devaluation.

If we don't soon start thinking like nationalists, this nation is going down, folks.
 
Granny an' possum play Monopoly w/ Chinese money...
icon_wink.gif

China Lets Yuan Drop Before Uncertainties of Trump Era
January 09, 2017 — The Chinese yuan fell against the dollar Monday, following losses Friday. The decline underlines the foreign exchange management challenges for Beijing, which is worried about U.S. President-elect Donald Trump's threat to declare China a currency manipulator. The slide came after the the People's Bank of China (PBOC), the central bank, reset the trading range lower to save the yuan from a market thrashing and a possible currency crisis, analysts said.
The slide in the yuan's offshore value is the worst slide since last June. It came soon after Beijing imposed foreign exchange restrictions on Chinese buying properties overseas, demonstrating how difficult it is for China to check capital flight, an important cause of the fall in the value of the yuan or RMB, the abbreviated form of renminbi. “The PBOC probably wants to avoid that an RMB slide becomes a one-way bet for the market, as this would make the pressure for further declines much harder to resist,” Jacob Kirkegaard, senior fellow at the Peterson Institute of International Economics told VOA.

8FA5936E-BE14-4CD7-A72A-E30D377563C0_cx0_cy7_cw0_w250_r1_s_r1.jpg

People walk past the headquarters of the People's Bank of China as two police officials patrol the area in Beijing​

While the central bank might be unwilling or unable to intervene constantly to prop up the RMB exchange rate, if it can make the market unpredictably volatile, it might make it hard for traders to gamble on RMB falling further, Kirkegaard said. The yuan fixed trading mid-range was 6.9262 to the dollar Monday, compared with 6.8668 on Friday. China allows the yuan to trade two percent up or down from its fixed mid-range each day.

Protection money

China usually spends a huge amount of money to protect the yuan from falling, and even pushes it up occasionally. The yuan strengthened against the dollar for a couple of days last week. This is why the POBC's decision to allow the currency to slide for two days is significant. Chinese officials have indicated Beijing is now rationing what it spends to protect the economy and is allowing the yuan to float close to realistic levels because it has already lost a significant portion of its foreign currency. Foreign currency reserves have fallen to around $3 trillion from $4 trillion in 2014. During that time, the U.S. dollar exchange rate has dropped by nearly one yuan. The State Administration of Foreign Exchange (SAFE) has issued new rules to control the use of foreign currency and has prepared a blacklist of people who have sent large amounts of money out of the country. Those on the list may be barred from converting RMB into foreign currency, state media said.

997D5877-D879-4DE3-ABAA-9C6BE214A25E_w250_r0_s.jpg

A U.S. 100 dollar bill featuring Benjamin Franklin is shown with a Chinese 100 yuan banknote with the late Chinese Chairman Mao Zedong​

Chinese authorities fear that capital flight from China, the strengthening dollar and possible adverse moves by Trump might result in a severe beating for the yuan in the coming weeks. "If the RMB drops suddenly very fast [as opposed to a slower managed decline], confidence among Chinese savers may collapse and the ability of Chinese firms to service foreign denominated debts may become difficult," Kirkegaard said. "It is hence imperative for the Chinese government to ensure that any downward movement in the RMB become gradual, rather than panicky." In recent weeks, banks have been asked to report all cash transactions exceeding 50,000 yuan ($7,200) to the central bank; the previous threshold was 200,000 yuan.

url=http://www.voanews.com/a/china-exchange-rate-yuan-falls/3669303.html]Rising outflows[/url]
 
They're doing this because they're willing to keep their workers poor for the wellbeing of the Government of China.

goofy of course!!! the people of China are getting rich. Economy is growing at 7% a year and has for 30 years. The Chinese people are now consuming more movies, cars, and plane trips than Americans. Care to try again?
 
This doesn't look good:

Chinese economy: 1930s beggar-thy-neighbour fears as China devalues - Telegraph


1930s beggar-thy-neighbour fears as China devalues

China has begun to devalue the yuan for the first time in over a decade, raising fears that it will set off a 1930s-style race to the bottom and tip the global economy into an even deeper slump.

The central bank has shifted the central peg of its dollar band twice this week in a calculated move that suggests Beijing aims to offset the precipitous slide in Chinese manufacturing by trying to gain further export share abroad.

The futures markets are pricing in a 6pc devaluation over the next year. "This is clearly a big shift in policy and we are now on alert," said Simon Derrick, currency chief at the Bank of New York Mellon.

The move follows a Politburo speech by President Hu Jintao warning that China is "losing competitive edge in the world market".

China has allowed a crawling 20pc revaluation over the past three years. Any reversal risks setting off conflict with the incoming team of President-Elect Barack Obama in Washington. Mr Obama called China a "currency manipulator" during the campaign, a term that carries penalties under US trade law.

Outgoing US Treasury Secretary Hank Paulson is viewed as a "friend of China". He called for a stronger yuan this week before embarking on a visit to Beijing, but the plea was couched in friendly terms. This soft-peddling may soon change.

Hans Redeker, currency head at BNP Paribas, said China's policy switch could set off a dangerous chain of events. "If they play this beggar-thy-neighbour game, it will cause a deflationary shock for the whole world," he said....

So you've heard Trumps complaints about China and devaluation?
 
This doesn't look good:

Chinese economy: 1930s beggar-thy-neighbour fears as China devalues - Telegraph


1930s beggar-thy-neighbour fears as China devalues

China has begun to devalue the yuan for the first time in over a decade, raising fears that it will set off a 1930s-style race to the bottom and tip the global economy into an even deeper slump.

The central bank has shifted the central peg of its dollar band twice this week in a calculated move that suggests Beijing aims to offset the precipitous slide in Chinese manufacturing by trying to gain further export share abroad.

The futures markets are pricing in a 6pc devaluation over the next year. "This is clearly a big shift in policy and we are now on alert," said Simon Derrick, currency chief at the Bank of New York Mellon.

The move follows a Politburo speech by President Hu Jintao warning that China is "losing competitive edge in the world market".

China has allowed a crawling 20pc revaluation over the past three years. Any reversal risks setting off conflict with the incoming team of President-Elect Barack Obama in Washington. Mr Obama called China a "currency manipulator" during the campaign, a term that carries penalties under US trade law.

Outgoing US Treasury Secretary Hank Paulson is viewed as a "friend of China". He called for a stronger yuan this week before embarking on a visit to Beijing, but the plea was couched in friendly terms. This soft-peddling may soon change.

Hans Redeker, currency head at BNP Paribas, said China's policy switch could set off a dangerous chain of events. "If they play this beggar-thy-neighbour game, it will cause a deflationary shock for the whole world," he said....

So you've heard Trumps complaints about China and devaluation?

yes but are they valid??
 
So I have a question. If another president is elected, the PBOC bank may not do this?
After the Yuan is dropped, what will happen to US economy?
icon_wink.gif



Granny an' possum play Monopoly w/ Chinese money...
icon_wink.gif

China Lets Yuan Drop Before Uncertainties of Trump Era
January 09, 2017 — The Chinese yuan fell against the dollar Monday, following losses Friday. The decline underlines the foreign exchange management challenges for Beijing, which is worried about U.S. President-elect Donald Trump's threat to declare China a currency manipulator. The slide came after the the People's Bank of China (PBOC), the central bank, reset the trading range lower to save the yuan from a market thrashing and a possible currency crisis, analysts said.
 

Forum List

Back
Top