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Strategies & Market Trends : Booms, Busts, and Recoveries
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To: RealMuLan who wrote (36393)7/22/2003 2:04:32 PM
From: energyplay  Read Replies (3) of 74559
 
An increase in the value of the Yuan will reduce the cost of those imports.

For comapnies selling to the expanding domestic market , this wold help profits.

For exporters, the effects will vary, depending on percent of interanl and external content.

Note that since China is generally the lowest cost producer, and the most price competition comes from other Chinese factories, it is likely that Chinese exporters have much more room to raise prices than would be expected.

A higher Yuan would also tend to raise prices of raw materials worldwide.

It would also increase capital equipment imports to China, and thus reduce some of the trade imbalances.
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