Cheaper yuan does little to boost exports
October 31, 2016 Category Foreign trade, Weekly
A 10% fall in the yuan’s value against the U.S. dollar over the past 15 months has done little to boost sales of Chinese goods abroad, according to dozens of exporters at the Canton trade fair, the South China Morning Post reports. The Chinese currency has depreciated steadily against the U.S. dollar since the People’s Bank of China (PBOC) devalued the yuan by 1.9% on August 11 last year, hitting a multi-year low of CNY6.77 to the dollar on October 25. But Chinese exports, in dollar terms, shrank 7.5% in the first nine months to USD1.5 trillion. Even in yuan terms, exports dropped by 1.6%. Chinese exporters attending the China Import and Export Fair in Guangzhou (Canton Fair) played down the exchange rate’s role and said they were pinning their hopes on stronger offshore demand and better products. “We have lowered our prices in dollar quotes for foreign clients because of the yuan’s depreciation but we haven’t seen immediate results,” Todd Zhao, a salesman at Shanghai Huayuan New Composite Materials, said. A dozen Chinese exporters at the fair said they were more concerned about economic conditions overseas. Some buyers said there were not enough new products at the fair.
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