Update for Recent development in Chinese Yuan 1. The expectation or speculation about a Chinese Yuan revaluation started from the beginning of 2003. 2. Why we say 2003? Because the Non-deliverable forward of USD against Chinese Yuan started to fall into discount from premium at the beginning of 2003. 3. Non-deliverable forward is a type of derivative in the foreign exchange market where by the home currency is not delivered (or settled, transferred) at maturity, instead the difference of market rate against the contract rate is settled with a reference currency (usually USD).
4. China has a very restricted money market and therefore commercial loans are not readily accessible in short tenor such as overnight or 1 week, the most common interest rate benchmark in China is a 1-year bank lending rate, which currently stands at 5. 31%, if we compare the Chinese interest rate with the US rate of the same tenor (1 Year US rate is approximately 2. 35%), in foreign exchange market, assumed that Chinese Yuan is convertible, the USD should be at a premium against the Chinese Yuan. In the non-deliverable market, however, the USD is trading at a discount against Chinese Yuan after January 2003, which obviously is not logical from an interest arbitrage point of view.
The Research paper on Factors of Chinese Art Market
The Chinese possess the longest continuous cultural history of any of the peoples of the world (Sickman. L, 1968). In recent years, pushed by the huge economic growth in Asia, the fine art market rise sharply within Asia, especially China, changed the geographical structure of the global art market. The Chinese government set up some preferential policies to promote the fine art market because ...
The reason is that the assumption that Chinese Yuan is freely convertible is void, the USD discount (for instance 1-year non-deliverable forward discount of USD is 2400 pips or 0. 24 Yuan) is an implied expectation of Chinese Yuan revaluation in one year’s time as perceived by the market. 5. The expectation that Chinese Yuan would appreciate and happen in foreseeable future was advocated by major US Investment Bank such as Goldman Sachs and Morgan Stanley. International organizations such as IMF started to talk more about the issue ever since 2 years ago.
In the recent years, there was a very fast expansion of Chinese export into the United State. The most recent number of US July trade deficit announced last Friday was $50. 1 billion, though lower than the June historical record of $55. 8, still formed as a threat for financing of these huge deficit through capital account surplus by the US. Furthermore, the July US trade deficit with China set another monthly record at $14.
9 billion as imports increased 3. 7% from June and exports fell 2. 6%. US manufacturers and politician still blamed China’s policy of pegging its currency against the US dollar for the soaring bilateral deficit.
6. Now that we know that the USD discount of Chinese Yuan NDF reflects the market’s expectation about Chinese Yuan revaluation percentage, we can look at the current market discount which stands at 0. 24 Yuan, working it against the current exchange rate of 1 USD = 8. 2766 CNY, it is reflecting a revaluation of 0. 24/8. 2766, a 2.
9% revaluation of Chinese Yuan against USD in one year’s time if the Chinese Yuan is made freely floating and convertible now. 7. The speculation about China’s readiness to give in to international pressure, particularly from the United States, to either un-peg its currency, or let the Yuan trade in a wider trading band reached its peak in September and October last year after the Group of 7 meeting in Dubai last year ended with a communiqu’e which called for more flexibility in exchange rate globally with particular focus on Asian countries. China and Japan were the best known countries in the world to prevent strengthening of their own currencies by intervening in the foreign exchange market to supply Chinese Yuan and Japanese Yen respectively against USD. 8. The 1-year USD discount of Chinese Yuan NDF reached a high of 0.
The Essay on Facts About China Years Ago
Facts About China 1. ) 21% of China's population live in urban areas and 79% live in rural areas. 2. ) China's national anthem is the 'The East is Red.' 3. ) The capital of China isBeiming or else Peking. 4. ) The name of the currency in China is Yuan. 5. ) The life expectancy in China for males is 65. 5 and for females is 69. 5. 6. ) The literacy rate in China is 80% 7. ) The main religions in ...
5 (5300 pips) in October 2003, which implied a 6. 4% revaluation hope of Chinese Yuan in a year. The discount narrowed to 0. 08 (800 pips) in July 2004 after a few months of credit tightening measures (macro adjustment) from China government which started from April 2004. 9. External pressure from trading partners had never seem to pose severe threat to the USD-Chinese Yuan peg as senior officials from China, including Chinese Premier, Wen Jiabao and Central Bank Governor, Zhou XiaoChuan, had reiterated China’s gradual and progressive approach towards the exchange rate regime in China.
For the capital accounts to be totally opened up, the most likely timely for such relaxation will most likely happen in 2008 to 2010 depends on economic conditions of China. 10. China did have internal pressure to let the Chinese Yuan strengthen a little bit because of fast grow of fixed directly investment and fast money supply growth during the past three to four years, high speed of money growth has created inflationary pressure in the country and that may be mitigated by a revaluation of Chinese Yuan. However, People’s Bank Governor, Zhou XiaoChuan had shown concern about the intention of the large influx of overseas capital into china, worrying that these might be due to speculation about near-term Chinese Yuan revaluation.
He therefore was doubtful over the degree of “true” pressure of Chinese Yuan revaluation as reflected by these high money growth figures. 11. Though China is still posting record surplus to US, she also posts deficits with various countries, especially the Asian countries. For the first 8 months of 2004, China has in fact accumulated US$900 million deficit to all other countries as a whole. This is a number which show substantial deterioration from a $25.
54 billion trade surplus in 2003. 12. These were general discussions, you may refer to the Chinese Book I give you or to my comments in Bloomberg or Herald Tribunal for further insight.
The Research paper on Dalai Lama Tibet China Chinese 2
Grasping for the Shadow of Identity There once lived a peaceful, ancient culture, isolated from civilization, living in peace and harmony with its surroundings, grounded in deep faith springing from its religious leader, blooming like a rose in the majestic hills. In what seemed like only minutes, this nation I speak of suddenly became a communist, occupied country, with no identity of its own, ...
