[NEWS] Forcing Yuan appreciation benefits nobody

Discussion in 'Modern Chinese Coins & Medallions' started by yennus, Oct 10, 2011.

  1. yennus

    yennus Well-Known Member Silver Stacker

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    Here's an interesting take on the Yuan/USD issue taking place at the moment.

    Forcing Yuan appreciation benefits nobody - http://english.cntv.cn/20111010/105352.shtml

    "The Senate cleared a procedural vote on Oct. 6 to advance a controversial bill, known as the Currency Exchange Rate Oversight Reform Act of 2011, which, if passed, will empower U.S. companies to impose punitive tariffs on goods imported from countries whose currencies they deem "undervalued.""

    "Since China began to reform its foreign exchange rate regime in 2005, the Renminbi has already appreciated more than 20 percent against the greenback. Yet the U.S. trade deficit with China is still going up and the U.S. jobless rate has remained stubbornly high. "

    It will be interesting to see what effect this has on Pandas.

    If we see an increase in the value of the Yuan, I would expect the price of Pandas to be rising too.
    If we see a decrease in the value of the Yuan, I imagine Pandas will maintain their current levels, with exception to the 2011s - which are closely tied to spot.

    I am of the opinion that the increase in the value of Yuan over the last 6 years has also been helpful in boosting the value of the Pandas.
     
  2. HustliN

    HustliN New Member

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    increase in rmb won't benefit me. means panda will be more expensive for foreigners

    it will increase the purchasing power of the average chinese citizen though.
     
  3. Lord Dragon

    Lord Dragon New Member

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    Its in the free markets interest for China to float their currency. Its good for the Chinese citizens purchasing power. Its good for Western countries as we may get back a manufacturing base.
    China is hurting everyone including their own citizens with the currency situation.
     
  4. nicwinner

    nicwinner Active Member Silver Stacker

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    strong disagree.

    Chinese gov try to protect their domestic industries and keeping produce benefit goods to westen countries. if RMB rise, Chinese domestic industry will be clashed and those clash will effect us to pay more for our living fees. believe or not
     
  5. Lord Dragon

    Lord Dragon New Member

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    Chinese citizens are already paying far more for imports than they should be. China cant provide everything it requires be that food or other technical imports.
    Also you have to take into account the environmental impact of having the worlds industry concentrated in one country with no pollution contols, thats hardly good for its citizens.
    There is also the factor if it keeps up the US, chinas major exporter will collapse and then who will china be making goods for? no one, so all those people will be out of work.

    The world will go back to its protectionist ways and tax imports to the hilt, which they will do if its the only way to save their own economies.
     
  6. yennus

    yennus Well-Known Member Silver Stacker

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    The appreciation of the Yuan is interesting in how it may affect the prices of Pandas.

    As Lord Dragon stated, "Its good for the Chinese citizens purchasing power [if the Yuan rises]" which is likely to make Pandas more affordable to the local Chinese population, but as HustliN noted "means panda will be more expensive for foreigners".

    Interesting dynamic.
     
  7. SilverPhoenix

    SilverPhoenix New Member Silver Stacker

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    What annoys me about this is that the US Congress and Senate has decided to give to US corporations the power to add what used to be colourfully called "squeeze" (tax, a "percentage", small denomination, unmarked bills in brown paper bag) to their competitor's products! Will the Aussie be deemed "undervalued" by US lamb, beef and pig providers? What about the US wool or iron and steel industries?

    Who decides and how that a currency is undervalued? Used to be the free market but that's long gone now. Can the import clerk make a recommendation to his boss that a currency is deemed undervalued, so they wack on a tariff? And who gets the tariff? Big business once again acting on behalf of Big government! There's no emoticon angry enough!!!!

    OK. Rant ends.
     
  8. tamo42

    tamo42 New Member

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    I just thought this needed repeating :).
     
  9. HustliN

    HustliN New Member

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    I'm curious what kind of changes will we see when the RMB does rise in value?

    Basically IMO all countries strives for an undervalued currency because their exports would look more attractive. Exports= locals producing goods= jobs/ economic activity.

    And yes long term a rise in RMB will make USA economy better since their wont be so many jobs being exported to foreign countries.
     

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