Skip to content
March 24, 2023
  • Facebook
  • Twitter
  • YouTube
  • Instagram
  • Reddit
  • Telegram
  • TikTok
  • LinkedIn
  • Discord
Orinoco Tribune – News and opinion pieces about Venezuela and beyond

Orinoco Tribune – News and opinion pieces about Venezuela and beyond

From Venezuela and made by Venezuelan Chavistas

Primary Menu
  • News
  • Opinion
  • About us
    • About us
    • Who we are – Becoming a Volunteer
    • Editorial guidelines for contributors
    • Our Sources
      • Venezuelan Sources
      • International Sources
    • Contact us
  • Categories
    • Politics
    • Economy
    • Security and Defense
    • International
      • Africa
      • Asia
      • Europe
      • Oceania
      • US/Canada
    • Latin America and ALBA-TCP
      • South America
      • Central America and the Caribbean (+Mexico)
    • Ideology-Commune-Labor
    • Health-Education-Sport-Culture-Technology
    • Solidarity and Social Movements
    • OT Specials
  • Support Us
Light/Dark Button
YouTube Channel
  • Home
  • News
  • The Yuan Grows Against the Dollar: is it Good or Bad for the Chinese Economy?
  • Asia
  • International
  • News

The Yuan Grows Against the Dollar: is it Good or Bad for the Chinese Economy?

December 19, 2020

The price of the Chinese yuan is rising against the dollar due to the strong growth of the Chinese economy and the weakness of the US currency. However, the People’s Bank of China could restrict this rise, some experts believe.

Beijing may step in to stop a surge that could jeopardize the economy and its political priority of promoting local innovation.

The Chinese currency has strengthened since June along with the country’s rapid economic recovery from the damage caused by the COVID-19 pandemic. On December 14 the yuan rose to 6.5361 US dollars, according to the China Foreign Exchange Trade System. Meanwhile, the dollar has weakened due to the pandemic and the resulting contraction of the US economy.

RELATED CONTENT: Russia, China Will Not Succumb to US-Led World Order: Lavrov

The yuan could strengthen further, as much as 10% to 6 yuan to the dollar or even more, believes Liu Ligang, the chief China economist at Citigroup.

“The problem facing China next year will be the huge and relentless inflow of capital. The rising value of the yuan will be a key threat to the Chinese macroeconomy,” Liu said in an interview with Bloomberg.

As the U.S. Federal Reserve, the European Central Bank, and other large central banks continue to pump large amounts of money into their financial systems to support growth and protect jobs, China is seeing a steady flow of funds into its financial systems, bonds , stocks and investment projects due to their better returns. The process is expected to continue over the next year.

While the boost in the national currency could give Chinese authorities the opportunity to advance their strategic goal of promoting the international profile of the yuan, the government does not want the currency to become too strong as it would affect other priorities, explains Ding Shuang, principal China economist at Standard Chartered.

The People’s Bank of China, the central bank of the country, is likely to take action if the currency grows too much or too fast in future, Ding clarifies, adding that a rise in the value of the yuan above 5% within one year could be considered by Beijing as “excessive.”

RELATED CONTENT: Cuba Celebrates Six Decades of Relations With the DPRK

To slow the rise in the value of the currency, the People’s Bank of China could adopt the following measures:

  • allow more capital outflow;
  • encourage direct investment abroad that is consistent with the core activities of companies;
  • or resume using the countercyclical adjustment factor to set the midpoint of the yuan’s permitted daily trading range.

The People’s Bank sets a daily benchmark rate for the yuan against the dollar that constitutes the center of its allowable trading range for the day and reflects its intention for the currency. The yuan is allowed to rise or fall by 2%.

After an unprecedented contraction of 6.8% in the first three months of this year, the Chinese economy has recovered strongly, registering growth rates of 3.2% in the second quarter and 4.9%, in the third.

Data for October and November suggest that the growth will accelerate further in the fourth quarter.

 

Featured image: © REUTERS / Kim Kyung-Hoon

(Mundo Sputnik)

Translation: OT/JRE/SC

Want More?

Don't want to be a victim of the Algorithm?

SIGN UP TO RECEIVE OUR WEEKLY NEWSLETTER WITH ALL YOU NEED TO KNOW ABOUT VENEZUELA

We don’t spam! Read our privacy policy for more info.

orinocotribune
Website | + posts
  • orinocotribune
    https://orinocotribune.com/author/orinocotribune/
    Photo composition showing the place where Peruvian repressive forces shot unarmed protester Rosalino Flores (left) at point blank, and a photo of Flores (right). Photo: Diario La Republica.
    March 24, 2023
    Perú: Protester Killed By 36 Pellets During Boluarte Regime Repression
  • orinocotribune
    https://orinocotribune.com/author/orinocotribune/
    Colombian President Gustavo Petro (left), escorted by Colombian Foreign Minister Álvaro Leyva, during the meeting with Venezuelan President Nicolás Maduro (right), escorted by Venezuelan National Assembly President Jorge Rodríguez, during their fourth meeting at the Aquiles Nazoa Cultural House in Caracas, Thursday, March 23, 2023. Photo: Presidential Press.
    March 24, 2023
    Presidents of Venezuela and Colombia Meet in Caracas, 4th Meeting in 7 Months
  • orinocotribune
    https://orinocotribune.com/author/orinocotribune/
    Venezuelan President Nicolas Maduro (left) and newly appointed Oil Minister Rafael Tellechea (right) meeting in Office #1 at Miraflores Palace, Caracas this Tuesday, March 21. Photo: Twitter/@NicolasMaduro.
    March 23, 2023
    President Maduro Names Pedro Rafael Tellechea New Minister of Petroleum (+PDVSA)
  • orinocotribune
    https://orinocotribune.com/author/orinocotribune/
    President of the Venezuelan National Assembly, Jorge Rodríguez. Photo: Twitter/@NoticiasBqto.
    March 23, 2023
    Jorge Rodríguez: Investigation Against Corruption Just Beginning (+Parliamentary Immunity Lifted)
Tags: China dollar Economic Growth revaluation The People's Bank of China Yuan

Share this:

  • Click to share on Twitter (Opens in new window)
  • Click to share on Facebook (Opens in new window)
  • Click to share on LinkedIn (Opens in new window)
  • Click to share on WhatsApp (Opens in new window)
  • Click to share on Reddit (Opens in new window)
  • Click to share on Telegram (Opens in new window)
  • Click to email a link to a friend (Opens in new window)

Continue Reading

Previous Previous post:

What the Results of Guaidó’s Consultation Reveal (or How to Wait for Biden’s Instructions)

Next Next post:

Canada will Violate Human Rights if it Extradites Huawei Executive to the US

The chief financial officer of the Chinese technology group Huawei, Meng Wanzhou, arrives at the Supreme Court in Vancouver, Canada, December 7, 2020. (Photo: AFP)

Subscribe to Our Weekly Newsletter

We keep your data private and share your data only with third parties that make this service possible. Read our Privacy Policy.

Check your inbox or spam folder to confirm your subscription.

NEWS: Most Viewed 72 Hours

Calendar

March 2023
M T W T F S S
 12345
6789101112
13141516171819
20212223242526
2728293031  
« Feb    

Categories

OPINION: Most Viewed 72 hours

We are on Telegram


Receive our news directly in your cellphone or PC, join us on our TELEGRAM channel: https://t.me/OrinocoTribune1

 

Download TELEGRAM, click the link above and then press the JOIN button.

We are on Discord


Now we are also on Discord you will be able to follow our every move and interact with our team.

Join us by clicking here



All our work is free to use and licensed under a Creative Commons Attribution 4.0.

We are on Reddit

If you are more into REDDIT, join our Orinoco Tribune Community.

 

Just click below and then click JOIN
https://www.reddit.com/r/OrinocoTribune/

  • Facebook
  • Twitter
  • YouTube
  • Instagram
  • Reddit
  • Telegram
  • TikTok
  • LinkedIn
  • Discord
Copyleft, No rights reserved.

Support us, DONATE NOW!