Posted by: changholt | February 22, 2010

Will the Chinese Renmenbi Appreciate?

What would happen if China allowed the Yuan to appreciate? Many have been guessing at this for years. However, some see China seen allowing stronger Yuan later this year.
According to Reuters, there is growing international pressure to make this a reality, and President Obama is leading this charge. Therefore, they believe it’s likely that Beijing will allow its currency to begin rising in value again this year.

“I think you’ll see appreciation probably resume this year,” John Frisbie, president of the U.S.-China Business Council, said during a panel discussion. “I think the pressures are building up for them to do so.”

Charles Freeman, a former U.S. trade official now at the Center for Strategic and International Studies, said he agreed Beijing would most likely let the Yuan rise in 2010 for the first time since mid-2008.

Freeman said he expected President Barack Obama’s administration to maintain pressure on the currency issue, but stop short of formally declaring China a currency manipulator in a Treasury Department report due April 15.

Many Western economists maintain that China’s currency is undervalued by 25 to 40 percent, giving Chinese companies an unfair advantage in international trade.
This will help US companies export to China. Many of our clients will benefit from the rise in the Yuan (renmenbi), giving the Chinese consumer more purchasing power for US good and services.


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