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taji
Points:12
(0)(0)
What yuan devaluation means for us...
China rattled global financial markets by devaluing its currency in what it said was an effort to make its exchange rate more market-oriented. The yuan's value declined 1.9 percent on Tuesday, its biggest one-day drop in a decade, and dropped a further 1.6 percent on Wednesday. The move could help Chinese companies by making their products less expensive in global markets. U.S. stocks sank, partly on fears about a worsening economic slowdown in China.
Sending some money back home, buying a house and or paying off a school loan? Well you've lost a "little" than.
Hopefully this won't last long, but no telling.. Does it worry you?
9 years agoin Money & Banking-AllAnswers(9) Comments(5) -
danial
Points:30The government says this is a move to get the Yuan on market valuations. I don't believe that. This is another extreme measure to prop up the economy. A weaker Yuan should encourage Chinese domestic consumption and help the export trade: things that China desperately needs right now. It is a risky move and I see further devaluation in the future.brandt:
Yeah I agree, it's to make their exports more competitive they're starting to lose out on a lot of sourcing orders to places like Bangladesh and Indonesia.
Weak yuan offsets rising salaries a bit.
Also you make a good point about domestic consumption. They want people buying stuff made here, so it's kinda like a hidden tarriff in that sense. Raise the price of Samsung phones relative to Xiamoi
9 years ago9 years ago -
johnpe
Points:30Saturday's article (three business days ago) as warning on pending Rmb devaluation from '0H':
http://www.zerohedge.com/news/2015-08-08/chinese-trade-crashes-and-why-y...
Chinese Trade Crashes, And Why A Yuan Devaluation Is Now Just A Matter Of Time
Submitted by Tyler Durden on 08/08/2015 15:59 -0400
http://www.zerohedge.com/news/2015-08-11/who-could-have-foreseen-chinas-...
What would you do, if you would read ZeroHedge daily as I do?
9 years ago -
louka
Points:12this is a tiny little devaluation... should be at minimum 10% ..... Chinese manufacturing and exports will and should get a boost........ they are good at it. Not cheap shit like the past .
The workers will not see the cash increase, but they will keep their jobs.
The big play?
Trump in the USA is saying he will bring the jobs home...... good luck ... pay your workers and give the the social benefits of Chinese workers.... free trade.... yah right.
my income is in Canadian dollars.... I love to see the yuan go down.... further the better.
jovanie:
In global currency debasement race, you should measure (any) currency in Gold spot price.
It doesn't mean you aren't 'hurt', if you don't get paid in Rmb.
9 years ago9 years ago -
zan
Points:30Hope it won't last long? Count another 10 -15% by the end of the year.9 years ago -
josephel
Points:30It's a bit like the oil price thing. When the price of oil was high, the oil companies were raking the cash in but the manufacturers suffered. Factory jobs were lost.
When the oil price dropped the oil companies were complaining they were not making money, so oil workers lost their jobs.
Same with currency. Cheap RMB = American manufacturers complaining about competition from China, so jobs will be lost in America But wait, what about the American companies who manufacture in china? They sell in $ to the US market, but buy labour, materials etc at local prices in the Chinese market. So it helps them.
It all balances out. Apple will not sell less iphones in China because the price goes up a little, and fear not, Apple will put the Chinese price up because they sell in $. But ha ha, Iphones are made in China, so Apple will get more in China for every buck it brings in.
Overall, the devaluation is good for Chinese manufacturing (and jobs) I reckon.
9 years ago -
craw
Points:30I'm paid in USD since 2015, so I just seat on the side and eat my popcorn with the 3d glasses on.
I tried to mention the drop to convince my wife to bring back so of our savings back home, instead of keeping it sleeping at the bank in China. She was unimpressed. To her credit : interest rates are low back home too. Also, it's 1 EUR for 7.16 RMB, so it's not like we took a huge hit, if we compare to 1 year or even 2 years ago. If it goes to 8 RMB, then she might feel it's time to do the move, psychology and all that....
When I didn't have much money, life was simple, no need to worry about savings that might or might melt down into oblivion. Now, it worries me at times, but I tell myself that having that kind of worries is a sign that I might not have much to worry about ?
sechovec:
easy... It's a devaluation, but it's not some Zimbabwe-scale catastrophe where everyone see years of work evaporating in a blink of an eye. Look at the change rate since January : it's not the end of the world yet, keep your boner for later.9 years ago9 years ago -
ming
Points:30What it means for us (americans living in china)
In the short-term Import prices could tick up a little bit and shopping back home when we change money is going to be a little bit more expensive.
For me specifically it's going to make my MBA tuition go up a little bit as a % of my salary. If it gets really bad possibly affect my plans to buy a rental property back home in the next year.
But you know honestly it's at 6.45 right now, and when I first came here it was around 7 to the dollar. It's not as if we're in uncharted territory in terms of valuations yet. It was 8.3 about 10 yrs ago.
It makes sense though for them to adjust it very quickly, to prevent people having time to sell off. If i lived in shenzhen I might be tempted to do a quick run across the border and diversify a bit but I don't. So...not going to lose sleep over it.
9 years ago -
saleem
Points:15After thinking a little more after my initial gut response, I'm wondering, is this part of China's plan? I'm sure the powers that be have known for awhile that they would have to devalue the yuan at some time. I'm sure they held off doing that until the Asian investment bank was set up with all the member countries holding currency in RMB as China needed to convince everyone the yuan was strong. I'm no expert in economics but I wonder if the Asian investment bank was set up for the purpose of supporting the yuan when it inevitably devalued. China is always good at playing the long game after all.romanenko:
Good point. The rmb has strengthened over the past few years under US pressure, who accused China of under valuing the rmb intentionally to make it's exports more attractive. It wont make any difference anyway. Some will gain, some will lose. It all balances out. I get paid RMB and I spend RMB.9 years ago9 years ago -
blake
Points:12The yuan was pegged to the US dollar, so even if the yuan devalues against the dollar, isn't it also possible it would become more valuable against other currencies? The Euro doesn't look so hot right now if Greece and Spain are any indication of things to come in the Eurozone.steves:
Lets just say the U.S dollar is going to be slapped by this and other countries will feel a less hurt but still this will be felt worldwide as it already has.9 years ago9 years ago
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