Posted by: changholt | November 10, 2010

The Chinese Renmenbi appreciates

Lat year I asked, “What would happen if China allowed the Yuan to appreciate? ”

It happened. teh RMB went from ~ 6.78 to $1 and is now closer to 6.70 to $1 , and is definitely effecting exports from China. This has been the result of  growing international pressure, and many believe it’s likely that Beijing will allow its currency to begin rising in value again next year.

Freeman said he expected President Barack Obama’s administration to maintain pressure on the currency issue. 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. As the Chinese consumer wealth increases and the USD devalues in comparison, US manufacturers are in the perfect position to sell products to the growing middle class. US entry into the Chinese market have never looked more attractive.

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