Tags: China | Tests | Stronger | Yuan

Report: China Stress Tests Potential of Stronger Yuan

Friday, 26 Feb 2010 07:40 AM

 

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink
China is conducting "stress tests" in the country's labor-intensive export sectors to see how much yuan appreciation firms can withstand, the local 21st Century Business Herald reported on Friday.

The newspaper cited industry sources as saying that the results of the test, conducted jointly by the Ministry of Commerce and the Ministry of Industry and Information Technology, would serve as a reference for the government's future yuan policy.

It added that these tests did not mean that Beijing was about to let the yuan appreciate, having frozen it in place against the dollar since mid-2008 as the government has tried to cushion exporters from the global financial crisis.

Nevertheless, the report marks a rare discussion in Chinese media about the feasible scope for yuan appreciation and comes amid rising speculation that Beijing may be on the verge of allowing yuan appreciation to resume.

According to the initial results of the tests, which focused on textile, garment, shoe and toy exporters, every percentage point of yuan appreciation would erode one percentage point of their profit margin. This would be a serious blow to profitability since their net profit margin is often only 3 to 5 percent, the newspaper said.

China has consistently said it will keep the yuan basically stable, a line that the commerce ministry repeated on Thursday.

A bipartisan group of 15 U.S. senators on Thursday insisted China's currency practices are effectively a subsidy and urged Commerce Secretary Gary Locke to consider action against Chinese imports.

© 2014 Thomson/Reuters. All rights reserved.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

Midterm Ad Casts Obama as Bad Boyfriend

Sunday, 21 Sep 2014 21:14 PM

A new TV ad produced by Americans for Shared Prosperity paints President Barack Obama as a bad boyfriend the country is  . . .

Who Wins Senate Control? Nov. 4 Might Not Decide

Sunday, 21 Sep 2014 08:54 AM

A suspenseful election night is one thing, but what if it stretches out for a month? Or into next year?
A handful o . . .

George P. Bush: I'm Not Endorsing Anyone in 2016 Race

Saturday, 20 Sep 2014 18:45 PM

George P. Bush is not endorsing anyone for the White House in 2016, even if his father, former Florida Gov. Jeb Bush, be . . .

Most Commented

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved