Can someone please explain this to me? Chinese Yuan is 6.41 for 1 dollar which is all time high Look at the chart below. http://finance.yahoo.com/echarts?s=...=on;ohlcvalues=0;logscale=on;source=undefined So Yuan is appreciating against the USD almost everyday that means Chinese products are getting more expensive in the international market. That means Chinese products are less competitive. By the same token, since Yuan is appreciating against the USD, whatever they import becomes cheaper in Yuan terms everyday, which means they are more competitive in Chinese market so technically they would import more. If the above statements are true, how come they are able to export more and import less and have record trade surplus? http://finance.yahoo.com/news/China...8.html?x=0&sec=topStories&pos=2&asset=&ccode=
Maybe you should ask the Japanese the same thing. One reason could be the govt subsidizes their exports to offset the currency appreciation so comapnies gain market share.
Because with their unfair trade practices they have destroyed production everywhere so for now people have no other choice but buying from China.
Because even now China retains huge cost advantages, with increasing productivity + infrastructure efficiency counter-acting higher wages. A Chinese worker as skilled as his American counter-part is earning 2000 RMB a month, with zero income tax. I'd expect the trade surpluses to end when that balance is restored.
Because "appreciating the most in 18 years to an all-time high" equates to the daily percentage gain/loss in Aussie dollar. The answer is the the peg to the US dollar weakens their currency as the Dollar falls. Some say that RMB is undervalued by 30%, I'd bet its closer to 100%. Why the worlds second largest economy needs a currency peg is beyond logic, and its time we got tough with these clowns. You want to solve the world's soveriegn debt problems? Force the Chinese to un-peg and let currency float freely.
From: Salary Survey Annual average income for employees in Shanghai reached around 65,000 CNY (10,000 USD) in year 2011. Average salary for software engineer/developer in China is around 100,000 CNY (15,400 USD). More experienced software senior developers receive around 150,000 CNY (25,000 USD) and more. From July 2010 NYT: "Last week the Japanese automaker Honda said it had agreed to give about 1,900 workers at one of its plants in southern China raises of 24 to 32 percent, in hopes of ending a two-week strike, according to people briefed on the agreement. The new monthly average would be about $300, not counting overtime. "
Maybe it is time for US and other western countries to make some changes in industry structures and employees incentive and other stuff. Even though Chinese Yuan can be appreciated to its proper level, the export share would switch to some other low production cost countries like ASEANs.
Hi Misterno, Even Chinese Yuan increase to 1 for 1 US dollar, China will continue exporting more and importing less. First, labor cost is way lower than US labor. A car/truck manufacturer worker can make $300 a month, how much a US worker make in GM? Second, Chinese government adds all kinds of fees to block the import. A basic model of Lexus car is $40,000 in US, after license fee and other fees, the car costs about $100,000 if importing from oversea. The Chinese Yuan increases from $8.8 for 1 US dollar (5 years ago) to current 6.4 for 1 US dollar, have you even seen less Chinese products, Nope. As a mater of fact, more and more coming every day. The US government thinks if they push Chinese Yuan high, we can balance the trade, that is totally wrong. The good ways are: 1. Keeps Chinese Yuan as is, and we can enjoy the low cost goods, such as clothing, toys, and daily necessities, we need all the low-end products produced in China, US workers do not want to make these; 2. For high-end products, such as computers, industrial products, healthy products, food, we need to produce here. For any company, like Apple, GM, who produce their products in China and import to US, we need to apply heavy fees on their products, and then we can force US manufacturers to move factories back to US. US government is playing a dangerous game to lift Chinese Yuan, when the Yuan reaches US dollar level, then US will lose their super power in the world. Thank about this.