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Sign up with Google Sign up with FacebookQ: Is the yuan really undervalued?
And, do you think its value would change much over the next few years if the government does relax trading restrictions?
12 years 3 weeks ago in Money & Banking - China
Taking the 6.3 present exchange rate (it was 6.28 Rmb per dollar last time I checked), I still feel that the Rembembi is still undervalue to some extend. And while some economists from Europe and USA still claim that a 30 % further reduction in value is needed, I feel that is a bit extreme, since it will place the value at 4.5 Rmb per dollar, and China will not go for that, unless other Chinese traits of character and ways to do business are also modified. And I am talking about honestly in their dealings, respect for copyrights, and above all, real quality products. Japan evolved from a supplier of cheap non durable goods, to a manufacturer of quality products that carved a nicth in the market place. With the devaluation of its currency and pressure with trading partners from abroad. China must make that transition too in order to survive with a decent level of exports.
China's cost of labor has increased some, but it is already loosing factories to India, Vietnam and other nearby countries with even cheaper labor rates. In order to keep market share, must increase its quality of workmanship levels, and not cut corners to keep profit levels.
In my opinion, I see an exchange rate between 5 and 6 Rmb per dollar in the next few years.
yes it is under valued quite a bit we talk about it and other trade relations in a bunch of my Econ class"s but i do not think they will stop until westerners stop wanting to buy cheap products, my debate club has even debated under valuing the dollar.
happy i by know means am an expert but i think japan was known for good products before the war it was the 9th largest GDP and one of the most powerful countrys in the league of nation. i think it more has to do with recovering from the war, and building up a better infrastructure and teaching there labor force new skills to better and knowledge to fit the worlds changing needs. so i think it had more to do with what they where able to do and what people where willing to buy from them after the war that made there products so inferior.
if you have any new facts please share i love learning new things and would enjoy hearing them.
It is under rated and is why the west taxes the imports to China so heavily. It gives the government the ability to hoard foreign currency and exchange at a significantly lower value. It hurts it's citizens the most as inflation begins to be excessive but keeps the rich well rich