Study: Substantial Revaluation Of Yuan Inevitable

Aug. 31, 2005
As Chinese President Hu Jintao gets ready to visit the U.S. next week, the Manufacturers Alliance/MAPI is saying China's rapidly growing trade surplus will lead to a substantial revaluation of the yuan, the Asian nation's currency. China's merchandise ...

As Chinese President Hu Jintao gets ready to visit the U.S. next week, the Manufacturers Alliance/MAPI is saying China's rapidly growing trade surplus will lead to a substantial revaluation of the yuan, the Asian nation's currency.

China's merchandise trade surplus with the rest of the world will more than quadruple this year to $140 billion and China's current account surplus, a broader measure of its international economic position, will reach $180 billion, predicts Ernest Preeg, senior fellow in trade and productivity at the alliance, an Arlington, Va.-based business and public policy research group. Looking at those numbers, Preeg concludes previous estimates that the yuan was undervalued by 25% to 50% were way too low and foresees an inevitable and large revaluation of yuan. "A 50% revaluation of the yuan is not excessive by historical standards," he says.

For more than two years, U.S. manufacturers, among others, have been pressuring the Bush administration to pressure China to revalue its currency to better reflect the true costs of production. China began a carefully controlled "float" of its currency this summer, following a 2.1% revaluation. But it remains to be seen just how much of a difference that will make to U.S. manufacturers.

Popular Sponsored Recommendations

Empowering the Modern Workforce: The Power of Connected Worker Technologies

March 1, 2024
Explore real-world strategies to boost worker safety, collaboration, training, and productivity in manufacturing. Emphasizing Industry 4.0, we'll discuss digitalization and automation...

3 Best Practices to Create a Product-Centric Competitive Advantage with PRO.FILE PLM

Jan. 25, 2024
Gain insight on best practices and strategies you need to accelerate engineering change management and reduce time to market. Register now for your opportunity to accelerate your...

Transformative Capabilities for XaaS Models in Manufacturing

Feb. 14, 2024
The manufacturing sector is undergoing a pivotal shift toward "servitization," or enhancing product offerings with services and embracing a subscription model. This transition...

Shifting Your Business from Products to Service-Based Business Models: Generating Predictable Revenues

Oct. 27, 2023
Executive summary on a recent IndustryWeek-hosted webinar sponsored by SAP

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!