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:
Retype 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

'Conservative War Chest' Targets Pryor, Gang of 5

Monday, 01 Sep 2014 21:52 PM

A conservative Super PAC has launched its 2014 campaign with a blistering ad accusing Senator Mark Pryor of being a sta . . .

Connecticut Republicans Sense Sweep In Works

Monday, 01 Sep 2014 21:44 PM

Republicans in the Nutmeg State feel "cautiously optimistic" that they will not only take the governorship that narrowly . . .

Unions Pouring Money into Democrats' Nov. Warchest

Monday, 01 Sep 2014 20:23 PM

Fearing Republican control of both the House and the Senate after the November midterm elections, labor unions are pouri . . .

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