China’s currency gains with flexibility

In this Nov. 27, 2008, file photo released by China's Xinhua news agency, a Chinese flag flutters in front of the headquarters of the People's Bank of China in Beijing. China's central bank said Sunday June 20, 2010, it would maintain a stable exchange rate and didn't anticipate major changes in the value of the yuan, a day after saying it would manage the currency more flexibly. In a commentary on Saturday's announcement, the People's Bank of China attempted to assuage fears of a major strengthening of the yuan, also known as the renminbi, or "people's money." (AP Photo/Xinhua, Gao Xueyu, File)In this Nov. 27, 2008, file photo released by China’s Xinhua news agency, a Chinese flag flutters in front of the headquarters of the People's Bank of China in Beijing. China's central bank said Sunday June 20, 2010, it would maintain a stable exchange rate and didn’t anticipate major changes in the value of the yuan, a day after saying it would manage the currency more flexibly. In a commentary on Saturday’s announcement, the People's Bank of China attempted to assuage fears of a major strengthening of the yuan, also known as the renminbi, or “people’s money.” (AP Photo/Xinhua, Gao Xueyu, File)
Question of the Day

Is it still considered bad form to talk politics during a social gathering?

View results

Regional markets gained Monday, as investors relieved of uncertainty over China’s currency policy bought airlines and other heavyweight shares.

“The markets were boosted because investors are becoming less risk averse than before. They are more aggressive,” said Ben Kwong Man Bun, chief strategist for KGI Securities in Hong Kong.

While foreign manufacturers have welcomed the relief a stronger yuan would bring, exporters in China, already operating on razor-thin margins, were less pleased.

“The exchange rate problem is one we would have to face sooner or later. That is a fact we have to accept,” said Bai Ming, deputy general manager of Zhejiang Mingfeng Car Accesories Co., which exports car covers to the Americas, Europe and South Korea.

Mr. Bai, whose factory employs 950 people, said his company’s export orders were outpacing his capacity to meet them. But with labor and other costs rising, the company will have to find a ways to stay competitive.

“What we are trying to do is to raise productivity and save costs. We cannot just sit back and wait,” he said.

Associated Press researchers Bonnie Cao in Beijing and Ji Chen in Shanghai contributed to this report.

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Comments
blog comments powered by Disqus
TWT Video Picks