Yuan woes

[abomvubuso]

This spring the euro dropped to a 12-year low, and recently the slump against the dollar was nearing 15% compared to the beginning of the year. At this background, the decision of the People's Bank of China to depreciate the Yuan by nearly 2% a couple of weeks ago shouldn't be such a big shock. And yet, that move did send ripples across the finance

Comments

[sandwichwarrior]

It seems to me that china has put themselves into the same bond that the Japanese did 20 years ago. The working-age population is shrinking as their liabilities are growing and clever book-keeping can only stave off the inevitable for so long. The longer a reckoning is delayed, the more violent the correction will be.

[htpcl]

People here at our backward corner are saying, so why should we care? This doesn't concern us. Well, here's some news for them: in a way, it does. Sure, a devaluation of 4% so far is too small to say for sure what the exact effects on the global economy would be, but it'll have an effect on trade, and it's already beginning to be felt. Entire sectors of our economy could be pushed aside. The imports from China into my country are quite diverse: machines, electronics, furniture, clothes, foods... Their prices would drop both for the end consumer and for the trading companies. Meanwhile, we're mostly exporting raw materials like copper, whose price doesn't entirely depend on China as a purchaser, because there's the global stocks exchange at play there. But if there's an overall drop in the currency rates, that could actually benefit our exporters

[luzribeiro]

China remains a developing country in almost every respect, despite the growth it has had through the years. The mindset ought to be changed first, only then the rest would follow. Including the way they conduct their economic policies.